PCNGI, LNG Arete Sign Agreement On $27.3m Mini Gas Plant Investment

The Presidential Compressed Natural Gas Initiative (PCNGI) has partnered with LNG Arete Limited on a significant investment worth $27.3 million.

This collaboration aims to enhance Nigeria’s natural gas infrastructure, particularly through the development of a mini LNG facility in Ajaokuta, Kogi State.

Programme director/CEO of PCNGI, Engr Michael Oluwagbemi, who made this known, said the partnership is for the construction of a Liquefied Natural Gas (LNG) plant with a processing capacity of seven million standard cubic feet per day (MMSCFD)which is expected to be completed within 12 to 18 months, to make access to gas resources more available, especially in the underserved regions like the north.

Speaking during the agreement signing in Abuja on Friday, Oluwagbemi said that LNG Arete has invested $12 million, while the PCNGI is providing $6 million, with potential for further expansion. The Midstream Downstream Gas Infrastructure Fund (MDGIF), under the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is providing the balance of the required investment.

Oluwagbemi said the project, which would employ over 100 Nigerians, would accelerate CNG infrastructure development in the North, securing a 25 per cent equity stake in LNG Arete’s seven MSCFD mini LNG facility located in Ajaokuta, Kogi state.

According to him, the project, which will become operational in the next 12 to 16 months, will establish a critical supply hub for CNG across Northern Nigeria, and beyond.

He said it would ensure stable cost-competitive CNG supply for industry and residential users in the north which was underserved.

He said due to increasing demands to access gas for transportation and industrialisation, the President was determined to bring affordable transportation programmes by leveraging abundant gas resources and boost steady supply to the end users.

“Gas is cheaper, safer, and more reliable. Of course, the previous administration and this administration have been committed to moving gas from the region where it is primarily produced today, which is the southern part of the country, to the rest of the country.

“That is why the Nigerian National Petroleum Company Limited (NNPC Ltd.) and its partners have been investing in the Ajaokuta-Kaduna-Kano (AKK) gas pipeline,’’ he said.

“From the producing fields, the project will focus on a liquefaction plant and implant storage at Ajaokuta, and eventual pipeline trucks which will be able to move gas over further distances across the north of Nigeria,’’ he assured.

He said the LNG which would be transformed to CNG could be utilised by our power plants, as well as our vehicles and other industries, boosting industrialisation.

The PCNGI boss said many industries across the north, ranging from textile, agriculture, processing to manufacturing, would benefit hugely from this project.

“The logistics, of course, of moving goods and food items from the north down to the south, especially, processed and manufactured products, will also be cheaper because of this project,’’ he assured.

“And even more importantly, is that even when the north gets piped by natural gas in a few years’ time, this plant is still going to be very critical to enable LNG trucks that run more efficiently on LNG, even better than CNG.

“Those LNG trucks will begin to move Nigerian products from Nigeria to Ghana, and to Senegal, ensuring Nigerian products are very competitive and creating jobs,’’ he said.

On her part, the project director, LNG Arete, Hajara Pitan, expressed appreciation to President Bola Tinubu, the management of PCNGi and other enablers that ensured the reality of the agreement.

“A major reason for the lack of development of the gas sector has been the fact that infrastructure and gas is expensive, but with the mini LNG technology, we’re able to participate as Nigerians in this sector in a major way.

“Our aim is clear in LNG Arete to support the federal government in deepening gas utilisation across Nigeria, and especially in the underserved regions of northern Nigeria.

“LNG is liquefied natural gas, and so what that means is that we take gas from where it originates, we liquefy it by reducing the quantity and allow it to move around more easily,’’ she said.