PCNGI, Firm Sign $27.3m Mini-LNG Deal to Boost CNG Penetration
Emmanuel Addeh in Abuja
The Presidential Compressed Natural Gas Initiative (PCNGI) yesterday signed a Memorandum of Understanding (MoU) with LNG Arete Limited, an indigenous company, for the construction of a $27.3 million Liquefied Natural Gas (LNG) plant in Ajaokuta, North-central Nigeria.
When completed, the facility would have a processing capacity of 7 Million Standard Cubic Feet Per Day (MMSCFD) and will primarily serve northern Nigeria and by extension the entire country.
Speaking in Abuja at the signing ceremony, a breakdown by the Chief Executive of the PCNGI, Micheal Oluwagbemi, showed that LNG Arete woulf provide a about $12 million of the funding as equity, while PCNGI is expected to contribute about $6 million equity. In addition, the remaining amount will be sourced from other identified investors.
“To achieve this, it’s very important that we provide the raw material, which is gas, which this country has in abundance to the end-user. Currently Nigeria’s gas resources far outstrips what we have in oil, but the constraint has always been how do we not just produce it, how do we distribute it and how do we get it to the final user in various forms,” Oluwagbemi stated.
Stressing that Nigeria has no business being solely dependent on oil, with gas being cheaper, safer and more reliable, Oluwagbemi stated that there has been increasing demand to be able to access gas to enable transportation and other sectors.
The PCNGI CEO stated that the project would be completed in between 12 to 16 months, explaining that when completed, it will help unlock gas resources to the north and democratise access to gas resources across Nigeria.
“So this is about industrialisation in the first instance. Many industries across the north, from textile to agriculture to processing to manufacturing, will benefit hugely from this project. The logistics of moving goods from the north down to the south, food items especially, processed and manufactured products will also be cheaper because of this project.
“And even more importantly, is that even when the north gets piped 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,” Oluwagbemi noted.
With the company having gone through various processes, and putting in about $12 million, Oluwagbemi stressed that the company is now able to unlock counterparty funding from the presidential CNG initiative.
According to him, the plant would employ over 100 Nigerians when completed, with plans for at least three additional plants in every state at the initial phase.
“This project is expected in total to take about $27.3 million. We are providing $6 million. And of course, we have given ourselves an opportunity to do more, if need be. We need to expand the footprint of this project, especially in the section of CNG stations and their network across the North. We expect this project to be completed in 12 to 16 months,” Oluwagbemi said.
In her remarks, Project Director, Arete LNG, Hajara Pitan, expressed delight at the significance of the agreement, lauding President Bola Tinubu and other stakeholders for enabling the project.
“LNG Erete is a 7 million LNG facility. And we’re very excited about what mini LNG unlocks in terms of Nigerian participation in the gas sector. The major reason for 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 to support the federal government in deepening gas utilisation across Nigeria, and especially in the underserved regions of northern Nigeria. So we’re very excited.
“This project is going to be completed in a 12 to 16 month timeline. And we’re excited for what it does, not just for mobility, which is one of our major targets, but for industrialisation in the region, and the employment of youth in that region,” she stated.
