The Presidential Compressed Natural Gas Initiative (PCNGI) and Arete LNG yesterday signed an agreement for the setting up of a $27.3 million mini-LNG processing plant in Ajaokuta, Kogi State.
Through the partnership between the firm and the initiative, the PCNGI invested $6 million in the project with Nigerian Midstream and Downstream Gas Infrastructure Fund also investing in the project.
Speaking at the signing of the deal in Abuja, the Programme Director/CEO of PCNGI, Engr. Michael Oluwagbemi said Federal Government’s involvement in the project increased the capacity from three million scuff of gas to seven million standard cubic feet.
According to him, the project is expected to make gas more readily available in the northern parts of the country.
Besides creating about 100 jobs at the plant in Ajaokuta, he disclosed that there will be additional three processing plants in each of the 19 northern states.
He noted that the project which is expected to be completed in the next 16 months would bridge the supply gap until the pipeline infrastructures are completed.
Oluwagbemi said, “The project is, not just solutions that will immediately solve the problem of unlocking gas resources to the north, but will also, over the long term, when those gas resources are in the north, are still quite useful for the economy. And that is why the mini LNG technology that we now have, that we have access to, makes the cut. Why does it make the cut? With mini LNG, we will be democratizing access to gas resources across Nigeria.
“The piped gas that currently gets to Ajaokuta can be liquefied. As you see in this diagram, which I have availed myself of, to demonstrate how this will happen. From the producing fields, our project will focus on a liquefication plant and an implant storage at Ajaokuta.
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“And the virtual pipeline trucks will be able to move gas in, of course, in denser form, being liquid, over further distances across the north of Nigeria. And this, of course, can then be used on sites at L-CNG stations that will be located across the Nigerian northern region. And even beyond that, the regions beyond that region, which is the whole West African coast, to transform that liquefied natural gas to compressed natural gas that can be utilized by power plants as well as our vehicles and other industries.”
He noted: “This is about industrialization at first instance. Many industries across the north, from textile to agriculture to processing to manufacturing, will benefit heavily from this project. The logistics, of course, 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.”
Oluwagbemi pointed out that Arete LNG has already invested $12 million in the project which has enabled the government to come up with the “finishing fund.”
“LNG Airete Limited having gone through various processes, including investment committees that partner organizations like the Midstream Downstream Gas Infrastructure Fund, and putting up its own money, about $12 million to be exact, is now able to unlock counterpart funding from the presidential CNG initiative.
“This is what we want when we ask for private sector partnership. We want companies that do not just come to us seeking for freebies, but ones that have already done their own work, developed their project, they’ve identified sources of funding that can plod along with us.
“Our work as government is then to catalyze the finishing funding to make that project a reality, to scale that project. Maybe this project will have a 3mm scuff if we don’t come in. Now it’s 7mm scuff a day.”
He added: “This project is expected, in total, to take about $27.3 million. We are providing $6 million. We expect this project to be complete in 12 to 18 months”.
Speaking at the event, the Project Director, LNG Arete Limited, Hajara Pitan, said the mini-LNG project would boost gas usage in the north.
“A major reason for lack of development of the gas sector has been the fact that infrastructure in 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 clear in LNG Arete to support the federal government in deepening gas utilization 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”, she added.
Also speaking, Executive Director, Portfolio, Ministry of Finance Incorporated, MOFI, Tajudeen Ahmed described the project as a welcome development, stating that the project has the full support of the MOFI.
