The Presidential Compressed Natural Gas Initiative (PCNGI) and LNG Arete Limited, a fully Nigerian-owned company with top-tier experience and expertise spanning the entire oil and gas value chain, has signed a Memorandum of Understanding (MoU) to build a $27.3 million LNG gas plant with 7MMSCFD processing capacity to serve northern Nigeria in particular and Nigeria in general.
The project, which was signed at the PCNGI office on Friday in Abuja, with Pi-CNG Program Director/Chief Executive, Engineer Micheal Oluwagbemi and the Project Director, LNG Arete, Hajara Pitan and other stakeholders in attendance, aimed to maximise market opportunities especially in autogas with potential to deepen local LNG utilisation as well as promoting economic growth and energy security.
While LNG Arete will fund the project with 46% equity funding and a proposed 25% equity injection by PCNGI, with the 29% equity balance from another identified investors.
Speaking at the signing ceremony, the PCNGI chief executive, Engineer Oluwagbemi, said the partnership aligns with President Bola Ahmed Tinubu’s goal to bring affordable transportation to the Nigerian market and to provide the raw materials, which is gas and which country has in abundance to the end users.
To achieve the President’s vision, Oluwagbemi said the PCNGI had to look for an immediate solution that is not only viable but sustainable, which is to unlock gas resources in northern Nigeria, which the whole country will benefit from on a long-term basis.
He said that the construction of technology-aided mini LNG technology in the North makes for easy access to gas resources across the country. He added that President Tinubu is concerned about making life more meaningful to Nigerians through an affordable transportation system that will have positive and far-reaching effects on the citizenry.
“This is a significant achievement along this journey of ensuring that we operationalise the President Bola Ahmed Tinubu’s goal to bring affordable transportation to the Nigerian market. To achieve this, of course, it’s very important that we provide the raw materials, which are gas, which this country has in abundance, to the end users.
“Currently, Nigeria’s gas resources, I don’t need to go through this, far outstrip what we have in oil. But the constraint has always been how do we not just produce it, but how do we distribute it and how do we get it to the final user in the various forms in which it can be used?
“The confidence that Nigerian people have had in Mr. President and his program in the last one year that we have launched the Presidential CNG Initiative, the way they’ve embraced this journey of leveraging gas resources for transportation as well as other critical sectors, have made the difference.
“We’re here today because Nigerian people have the belief in the President’s vision that this country blessed with gas in over 30 of our 36 states has no business being solely dependent on oil. Gas is cheaper, it’s safer and is more reliable. Nigerian people’s belief also meant that all across this country, especially in the far North, there has been increasing demand to be able to access gas to enable transportation and other sectors.
“This is an investment. One of our mandates you recall, our second mandate is to facilitate investment. And part of facilitating investment sometimes especially for big project like this is to co-invest.
“We are co-investing alongside not just LNG Arete that has invested $12 million of its own money but also alongside Midstream Downstream Gas Infrastructure Fund, that is MDGIF as well. So, we are two quasi-government agencies that co-investing alongside the private sector. Our money is unlocking in terms of investment,” Oluwagbemi stated.
The Project Director, LNG Arete, Hajara Pitan, said the project was to support the Federal Government’s efforts in deepening gas utilisation across Nigeria and especially in the underserved region of Northern Nigeria.
While thanking the Federal Government for providing the enabling environment to serve Nigerians, she expressed optimism that the mini LNG will not only unlock Nigeria’s participation in the gas sector but that the gas can be used for mobility CNG which is cleaner, cheaper as well as industrialisation and power.
“We’re very grateful to have signed this agreement today. Grateful to President Bola Ahmed Tinubu, grateful to Dr Zach Adedeji. I’m grateful to Engineer Michael Oluwagbemi as well as MOFi, the GACN and all the enablers that made sure we came to this point in this agreement. LNG Arete is a 7MMSCFD LNG Facility in Ajaokuta, Kogi State.
“And we are very excited about what mini LNG unlocked in terms of Nigeria’s participation in the gas sector. 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 are able to participate as Nigerians in this sector in a major way.
She said, “Our aim is clear is LNG Arete, and it is to support the Federal Government in deepening gas utilisation across Nigeria and especially in the underserved region of Northern Nigeria. So we are very excited. This project is going to be completed in a 12 to 16 months timeline and we are excited for what it does not just for mobility CNG, which is one of our major targets, but for industrialisation in the region and the employment of youths in that region.
“As we all know, LNG is liquified natural gas and what that means is that we take gas, we liquify to reduce the quantity in that sense and allow it move around more easily. As Engineer (Michael) Oluwagbemi said earlier, a huge problem is how does gas move from where it originates to where it needs to be used and the northern part of Nigeria is underserved in terms of gas because the gas resources don’t necessarily originate from there.
“But because we are a Federation and a nation, part of what we’re doing is how do we take it from where it originates from where it needs to be used. That gas can be used for mobility CNG, which is a cleaner, cheaper gas. It can be used for industrialisation, for power, to grow our economy generally, and that is LNG Arete’s vision to participate with the Federal Government to do all of that.
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