NNPCL: Cushioning Impact of Fuel Subsidy Removal with CNG Projects
feanyi Onuba
Exactly one year ago, President Bola Tinubu while speaking during his inauguration speech as Nigeria’s 16th President announced the removal of fuel subsidy.
“Fuel subsidy is gone,” the president had declared. The declaration by the president led to an increase in the price of Premium Motor Spirit popularly known as petrol from N197 to N617 per litre.
Few days after the proclamation by the president, the government kick-started the plans that were projected in different phases of execution, which were meant to cushion the effect of the removal, and also see to the uninterrupted availability and accessibility of fuel all around the country.
At the centre of the execution of that plan is the Nigerian National Petroleum Company Limited (NNPCL). The President had also set up the Presidential CNG Initiative (PI-CNG), a secretariat to drive the implementation of CNG across Nigeria as a cleaner alternative fuel to PMS.
Since the announcement of subsidy removal, the NNPCL has doubled its efforts to drive energy security by utilising Nigeria’s abundant gas resources.
The company has delivered numerous gas projects that would drive CNG gas penetration across the country.
Last year, the NNPCL entered a partnership with NIPCO to set up 35 compressed natural gas (CNG) stations in Lagos and other parts of the country.
During the partnership, the Group Chief Executive Officer of the NNPCL, Mele Kyari had said the partnership is “Part of the NNPCL commitment to reducing carbon footprint and providing cheaper alternative fuel to motorists.”
On May 19, 2024, the NNPCL and partners delivered three critical gas infrastructures commissioned by the President.
The projects were, the AHL Gas Processing Plant 2 (GPP – 2) – 200mmscf/d which is an expansion to the Kwale Gas Processing Plant (GPP – 1); the AHL Gas Plant, which is being developed by AHL Limited, an incorporated Joint Venture owned by NNPC Limited and SEEPCO and the ANOH-OB3 CTMS Gas Pipeline Project.
In furtherance of efforts to drive increased gas utilization in the country, the Federal Government on Thursday commissioned the 5.2 MMSCFD Compressed Natural Gas/Autogas Facility at Ilasamaja, Lagos, built through a partnership between the NNPC Limited and Transit Gas Nigeria Limited (TGNL).
Under the theme: “From Gas to Prosperity; CNG For All”, the NNPC CNG Station is a 5.2MMscf per day capacity station that can serve vehicles and also supply gas to industries and other companies.
The station is strategically located and it is expected to meet the fuelling needs of motorists, in line with the federal government’s goal of nationwide adoption of CNG as the fuel of choice for transportation.
The Facility is 100 per cent energy sufficient due to the natural gas advantage and does not depend on the national grid for power. It will serve thousands of Natural Gas-powered vehicles in Lagos and its surroundings; while promoting a stable, cleaner energy for domestic utilization. It will also contribute significantly to annual carbon-dioxide emissions savings and support environmental sustainability.
The commissioning, which was performed by the Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, had dignitaries in attendance such as the Lagos State Governor, Babajide Sanwo-Olu; Group Chief Executive Officer of NNPC Limited, Mele Kyari; Chief Executive of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA); Farouk Ahmed, represented by Executive Director, Hydrocarbon Processing Plants, Installations and Transportation Infrastructure, Francis Ogaree; Commission Chief Executive of Nigerian Upstream Petrolatum Regulatory Commission (NUPRC), Gbenga Komolafe, represented by Regional Director, Lagos, Paul Osu, among others.
The host governor, Babajide Sanwo-Olu, and the Minister of State for Petroleum Resources (Gas), Mr. Ekperikpe Ekpo, jointly carried out the tape-cutting and unveiling on Thursday.
The minister said the launch of this initiative also underscores this administration’s commitment to fostering a cleaner environment by reducing carbon emissions and promoting energy security through the utilization of domestic natural gas resources.
He said the inauguration of the project is a testament to the unwavering commitment of NNPC Ltd. and its partner, Transit Gas Nig Ltd., to support the federal government’s objectives of utilizing the country’s abundant gas resources to accelerate the nation’s economy and growth.
According to Ekpo, the commissioning of the flagship retail plant in Lagos marks a significant milestone in the nation’s journey towards achieving energy security, accessibility, and affordability in line with Mr. President’s “Renewed Hope Agenda.”
He said, “Our gathering here is testament to the unwavering commitment of NNPC Ltd. and its partner, Transit Gas Nig Ltd., to support the federal government’s objectives of utilizing our abundant gas resources to accelerate the nation’s economy and growth.
“Although the elimination of the Premium Motor Spirit (PMS) subsidy has brought difficulties, it has also given us a once-in-a-lifetime chance to invent and adopt more economical, efficient, and sustainable energy alternatives.”
Ekpo noted that the use of CNG as a transport fuel is a mature technology used globally, as it is the cleanest burning fuel in terms of Nitro-oxide and soot emissions.
“While it can be employed to power passenger cars and city buses, CNG passenger vehicles emit 5 to 10 per cent less carbon-dioxide than comparable gasoline-powered passenger vehicles,” the Minister added.
Earlier in his remarks, the GCEO NNPC Limited, Mallam Mele Kyari, said that to maintain energy security and provide more access to CNG by the Nigerian populace, NNPC has reached a Final Investment Decision (FID) with Axxela Limited to deliver six CNG mother and service station plants and stations of 5.2 mmscfd capacity each, in selected locations spread across the six geopolitical zones, including the FCT, to ease access to bulk CNG.
He stated that the move was in addition to NNPC Retail’s phased deployment of CNG in over 100 stations across the country as well as other Joint Venture partnerships on CNG.
In particular, Kyari revealed that the commissioning of the NNPC CNG Station in Ilasamaja, Lagos, was part of NNPC’s efforts to grow domestic gas supply and utilization by deploying gas infrastructure nationwide.
He said the Petroleum Industry Act (PIA) explicitly mandated NNPC to promote domestic gas utilisation, thereby strengthening the company’s resolve to deploy critical gas infrastructure projects across the country.
“NNPC will continue to deliver more strategic projects for the benefit of our country. We shall utilise our gas resources for industrialisation, power generation and economic prosperity for all,” Kyari stated.
With CNG costing one-fifth the price of super gasoline, resulting in substantial savings in fuel costs, Sanwo-Olu said the government would embrace the intiative to drive down the costs of energy.
When compared to gasoline-powered vehicles, the governor noted that CNG generally reduces harmful emissions such as carbon monoxide (CO), carbon dioxide, and nitrous oxide (N2O) by as much as 95 per cent.
He said, “It’s an honour that the management of the Nigerian National Petroleum Company Limited and the Ministry of Gas deem it fit. This historic initiative started in Lagos; we won’t take it for granted.
“For businesses, CNG will reduce operational costs, and for individuals, it is more money in the pocket because CNG costs one-fifth the price of super gasoline.
“We need to commend the federal government-led President Bola Tinubu for working the talk, because a year ago, we taught this wouldn’t be possible. This very bold and audacious move shows the path of renewed hope for Nigerians.”
Sanwo-Olu, said the establishment of the CNG plant aligns perfectly with his vision for economic development, job creation, and industrialisation, in the State.
He said in demonstration of its resolve to champion CNG utilisation across Lagos State, the State Government has concluded plans to deploy 2,500 conversion kits and over 2,000 new CNG buses, which will commence operations before the end of the year.
The Ogun State Governor, Dapo Abiodun, represented by the State Commissioner of Environment, Mr. Ola Oresanya, said the State is supporting capacity building in CNG conversion to ensure sustainability and promote economic development within the State and beyond.
In his goodwill message, the Chief Executive, Presidential CNG Initiative, Engineer Michael Oluwagbemi, described the plant commissioning as a testament to President Tinubu’s commitment to providing sustainable energy solutions for Nigerians.
The CEO of Axxela, Bolaji Osunsanya, thanked all the stakeholders, especially the NNPC, for its consistent vision towards the delivery of the plant, stressing that his company’s many years of preparation have now met a golden opportunity to deliver cleaner, cheaper energy to Nigerians.
