Nigerian govt, LNG Arete sign $27 million agreement to develop mini LNG plant

The Nigerian government on Friday signed a $27.3 million agreement with the LNG Arete, to develop a mini Liquified Natural Gas (LNG) plant in Ajaokuta, Kogi State.

The Presidential Compressed Natural Gas Initiative (PCNGI) said the agreement will help the transportation of gas to other parts of the country, especially to the far North.

Speaking during the signing ceremony in Abuja on Friday, the Programme Director/Chief Executive of PCNGI, Michael Oluwagbemi, said LNG Arete has gone through various processes and committed about $12 million as counterpart funding for the project.

“The project is expected, in total, to take about $27.3 million, of which $6 million is being provided by the PCNGI,” Mr Oluwagbemi said.

He said the completion period for the project is 12 to 18 months, noting that the equipment required was already available.

“This is what we want when we ask for private sector partnership. We want companies that do not just come to us seeking freebies but ones that have already done their own work, developed their project, and have identified sources of funding that can play along with us.

“Our work as government is then to catalyse the finishing funding to make that project a reality, to scale that project. Maybe this project will have a 3mm scope if we don’t come in, but now it’s a 7mm scope a day, and that is our work as a government. But even more importantly is that we are putting incentives in place, which is part of this package of what we’re signing today to fast-tracking permits and enabling gas allocation,” he said.

He explained that despite the abundant gas resources in the country, the constraint has always been how not just produce it, but how to distribute it.

“Nigerians since the introduction of the programme have expressed confidence as well as embraced President Tinubu’s mandate of leveraging gas resources for transportation, as well as other critical sectors,” he said.

He noted that the need to ensure that the country enjoys the benefits of cheaper, cleaner, safer, and more reliable gas has driven the PCNGI to look for immediate and sustainable solutions.

“We are here today because Nigerian people have believed in the president’s vision that this country, a country blessed with gas in over 30 of our 36 states, has no business being solely dependent on oil. Gas is cheaper, it is safer, and it’s 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,” he added.

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In her remarks, Hajara Pitan, project director of LNG Arete, said the project will deepen Nigeria’s participation in the gas market, noting that the major reason for the 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 is to support the federal government in deepening gas utilisation across Nigeria, especially in the underserved regions of northern Nigeria.

“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 CNG mobility, which is one of our major targets, but for industrialisation in the region and the employment of youth in that region,” she added.