PCNGi signs $27.3m MoU to construct LNG Plant

By Abubakar Yunusa

The Presidential Compressed Natural Gas Initiative (PCNGi) has joined forces with LNG Arete Limited in a $27.3 million partnership to build a seven-million standard cubic feet per day (mmscfd) liquefied natural gas (LNG) plant.

The memorandum of understanding (MoU), signed recently, aims to expand compressed natural gas (CNG) infrastructure and enhance gas availability in northern Nigeria, creating significant economic opportunities.

The project, which is backed by a joint investment from PCNGi, LNG Arete, and the Midstream Downstream Gas Infrastructure Fund under the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), will provide over 100 jobs.

The investment includes $6 million from PCNGi and $12 million from LNG Arete.

Michael Oluwagbemi, CEO of PCNGi, stated that the plant, expected to come online within 12 to 16 months, will help establish a vital supply hub for CNG in the northern region and beyond.

“The project is designed to ensure a stable, cost-competitive gas supply for underserved industries and households,” he said.

In a statement, Oluwagbemi underscored the significance of the initiative in President Bola Tinubu’s broader strategy to harness Nigeria’s gas resources.

He noted that the project is in line with the government’s commitment to facilitating affordable transport programmes and boosting industrial growth.

“Gas is cheaper, safer, and more reliable,” he said, highlighting the ongoing efforts to expand the country’s gas infrastructure, including the Ajaokuta-Kaduna-Kano gas pipeline.

The development will also be a catalyst for economic growth in the northern states, particularly in sectors like textiles, agriculture, and manufacturing.

The conversion of LNG to CNG will provide power to industries and transportation, reducing logistics costs and enhancing the competitiveness of Nigerian products both locally and in export markets such as Ghana and Senegal.

“We are particularly excited about how this will positively impact the logistics of moving goods, especially processed products, from the north to the south,” Oluwagbemi added.

 “Even after the region receives piped natural gas, the LNG plant will remain crucial for ensuring efficient transport of goods through LNG-powered trucks.”

Hajara Pitan, project director at LNG Arete, expressed her appreciation for the collaboration and acknowledged the challenge of developing the gas sector due to high infrastructure costs.

“The mini LNG technology makes it possible for Nigerians to actively participate in this sector, and our goal is to deepen gas utilisation, especially in underserved regions,” she said.