The Presidential Compressed Natural Gas Initiative (P-CNGi) and LNG Arete Ltd. have signed a pivotal Memorandum of Understanding (MoU) for a $27.3 million gas plant project aimed at expanding compressed natural gas (CNG) infrastructure across Northern Nigeria.
This collaboration, signed on Friday, as reported by the News Agency of Nigeria (NAN), is set to address the region’s long-standing energy challenges, particularly in the transportation and industrial sectors, which have struggled with limited access to reliable and affordable energy.
The agreement, finalized by Mr. Michael Oluwagbemi, Programme Director and CEO of P-CNGi, alongside key representatives of LNG Arete Ltd., will see the construction of a Liquefied Natural Gas (LNG) plant with a processing capacity of seven million standard cubic feet per day (MMSCFD).
The plant will significantly improve the supply of CNG to industries and households in Northern Nigeria, an area that has been historically underserved by stable gas infrastructure.
“The Presidential Compressed Natural Gas Initiative (P-CNGi) and LNG Arete Ltd. on Friday signed a Memorandum of Understanding (MoU) on $27.3 million gas plant project to boost CNG infrastructure investment, expansion, and availability.
“The Programme Director/Chief Executive Officer, P-CNGi, Mr Michael Oluwagbemi, said the partnership aimed at constructing a Liquefied Natural Gas (LNG) plant with a processing capacity of seven million standard cubic feet per day (MMSCFD),” the NAN report read in part.
The report further disclosed that as part of the agreement, P-CNGi will contribute $6 million, while LNG Arete Ltd. will invest $12 million into the project. The remaining funds will be provided by the Midstream Downstream Gas Infrastructure Fund, managed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The plant is expected to create over 100 jobs for Nigerians and is slated to be operational within 12 to 16 months.
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Mr. Oluwagbemi emphasized that this partnership will establish a key supply hub for CNG, ensuring that gas becomes more accessible and cost-competitive for users in the north.
“This project will not only meet the energy demands of industries but also accelerate industrial growth and create jobs in the region,” he said.
- He noted that this initiative supports P-CNGi’s goal of utilizing Nigeria’s abundant natural gas resources to provide cleaner, more affordable, and sustainable energy, especially in underserved regions.
- The LNG plant, situated in Ajaokuta, Kogi State, will serve as a key hub for gas distribution across Northern Nigeria. According to the P-CNGi CEO, it will reduce transportation costs, support industries like textiles, agriculture, and manufacturing, and lower logistics expenses for goods moving from the north.
- The project is intended to complement the Ajaokuta-Kaduna-Kano (AKK) gas pipeline, enhancing gas access across the country. Once operational, the plant will convert LNG into CNG, offering an efficient, cleaner fuel option for industries and transportation, boosting Nigeria’s competitiveness regionally and globally.
For LNG Arete Ltd., Hajara Pitan, Project Director, described the project as a significant step in expanding gas utilization across Nigeria. The mini-LNG technology will foster increased local participation in the sector and help address the energy gap in underserved regions.
