The Presidential Compressed Natural Gas Initiative has formalised a $27.3 million agreement with LNG Arete Limited to establish a Liquefied Natural Gas plant in Ajaokuta, Kogi State.
Both parties revealed that the project would facilitate gas transportation to other regions of Nigeria, particularly the North.
During the signing ceremony in Abuja, PCNGI Programme Director, Micheal Oluwagbemi stated that LNG Arete had completed necessary processes and committed $12 million in counterpart funding.
Oluwagbemi explained that the full cost of the project is pegged at $27.3 million, with PCNGI contributing $6 million.
Additional support would come from the Nigerian Midstream and Downstream Gas Infrastructure Fund.
He noted the project is expected to be completed within 12 to 18 months and emphasized that the necessary equipment is already available.
According to him, the Federal Government’s involvement significantly expanded the plant’s processing capacity.
“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 the ones that have already done their work, developed their project, they have identified sources of funding that can work 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 3m SCF if we don’t come in but now it’s 7m SCF a day and that is our work as 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.
Oluwagbemi highlighted that although Nigeria is rich in gas, distributing it remains a major challenge.
He underlined that the North would have easier access to gas thanks to the Ajaokuta LNG project.
Oluwagbemi revealed intentions to build three further gas processing facilities in each of the 19 northern states, in addition to generating over 100 direct jobs at the Ajaokuta location.
He added that the initiative is driven by the need to deliver affordable, cleaner, and more dependable gas solutions to Nigerians.
“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.
“The project is not just a solution 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.”
In her remarks, LNG Arete Project Director, Hajara Pitan, emphasized the impact of the initiative on Nigeria’s gas industry.
She pointed out that high infrastructure costs have historically hampered gas sector growth.
“But with the mini LNG technology, we can 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.
“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 mobility CNG, which is one of our major targets, but for industrialization in the region and the employment of youth in that region,” she said.
Also speaking at the event, Executive Director, Portfolio, Ministry of Finance Incorporated Tajudeen Ahmed, described the project as a welcome development.
