The Federal Government, through the Presidential Compressed Natural Gas Initiative (PCNGI), signed a $27 million agreement with LNG Arete to develop a Liquefied Natural Gas (LNG) project in Ajaokuta, Kogi State.
According to both parties, the project will facilitate gas transportation across the country, particularly to northern Nigeria.
During the signing ceremony in Abuja PCNGI Program Director Michael Oluwagbemi stated that LNG Arete Limited had undergone various approval processes and committed $12 million as counterpart funding.
Oluwagbemi revealed that the total project cost would amount to $27.3 million, with PCNGI contributing $6 million, and additional support coming from the Nigerian Midstream and Downstream Gas Infrastructure Fund.
He announced a completion timeline of 12 to 18 months, adding that essential equipment was already available.
He emphasized that government involvement increased gas capacity from three million to seven million standard cubic feet per day.
“This is the type of private sector partnership we seek,” he explained. “We want companies that come prepared—with developed projects, funding sources, and clear plans—rather than those simply looking for government handouts.”
He added, “Government’s role is to catalyze and scale projects, not build them from scratch. Without our support, this project might have remained at 3 million scfd; with us, it’s now 7 million.”
He also highlighted that government incentives, such as fast-tracking permits and facilitating gas allocation, formed part of the deal.
Oluwagbemi stressed that although Nigeria possesses abundant gas resources, distribution has always posed a major challenge.
He explained that the project would make gas more accessible in northern Nigeria.
Beyond that, he noted that the Ajaokuta plant would generate about 100 jobs, and the initiative plans to establish three additional processing plants in each of the 19 northern states.
He emphasized that the PCNGI aims to deliver sustainable solutions to ensure Nigerians benefit from cleaner, cheaper, safer, and more reliable gas.
“We’re here today because Nigerians have embraced the President’s vision: this gas-rich country should not depend solely on oil,” he said.
He noted that demand for gas in northern Nigeria has been rising, especially for transportation and other sectors.
According to him, the project not only provides an immediate solution to unlock gas for the North, but also holds long-term economic value as future gas reserves in the region become accessible.
He said the mini LNG technology plays a key role in this transformation.
“With mini LNG, we can democratize gas access across Nigeria,” he stated.
He described how the piped gas reaching Ajaokuta would be liquefied and stored on-site.
Virtual pipeline trucks would then transport the liquefied gas to northern Nigeria and potentially to West African countries.
This gas, he explained, would be converted to Compressed Natural Gas (CNG) at L-CNG stations, where it would power vehicles, industries, and power plants.
In her remarks, Hajara Pitan, Project Director at LNG Arete, affirmed that the project would deepen Nigeria’s involvement in the gas market.
She explained that high infrastructure costs have long hindered the sector’s growth.
“But with mini LNG technology,” she said, “Nigerians can now participate in the sector in a significant way.”
She reaffirmed LNG Arete’s commitment to supporting the federal government’s gas expansion efforts, especially in underserved northern regions.
She projected a 12 to 16-month completion timeline, expressing optimism about the project’s impact on CNG mobility, regional industrialization, and youth employment.
Also speaking, Tajudeen Ahmed, Executive Director at the Ministry of Finance Incorporated (MOFI), described the project as a welcome development and assured the public of MOFI’s full support.
source: punchng.com
