— The Bureau Business Desk | April 5, 2025 | Abuja
The Federal Government of Nigeria, through the Presidential Compressed Natural Gas Initiative (PCNGI), has signed a $27.3 million deal with LNG Arete Ltd. to establish a Liquefied Natural Gas (LNG) project in Ajaokuta, Kogi State—marking a major step toward enhancing gas accessibility across the country, particularly the northern region.
The agreement, signed in Abuja on Friday, aims to build a mini-LNG facility that will enable the transportation of liquefied gas via virtual pipelines to parts of Nigeria not connected by traditional gas infrastructure.
Private Sector-Led, Government-Backed
Speaking at the signing ceremony, PCNGI Program Director, Michael Oluwagbemi, revealed that LNG Arete has already committed $12 million as counterpart funding for the initiative, showing strong private-sector dedication. The government, through PCNGI, will contribute $6 million, while additional investment is expected from the Nigerian Midstream and Downstream Gas Infrastructure Fund.
“The entire project is valued at $27.3 million, and completion is expected within 12 to 18 months,” Oluwagbemi disclosed. “Equipment for the project is already available, which will fast-track development.”
Boosting National Gas Distribution
According to him, government intervention has helped upscale the project’s capacity from three million to seven million standard cubic feet of gas per day.
“This is what effective public-private partnership should look like,” he noted. “We are not here to fund pipe dreams—we are here to catalyze real projects. This project is now scaled up because the government stepped in.”
Oluwagbemi stressed the strategic importance of the initiative, noting that while Nigeria is rich in gas resources, distribution has always been a major bottleneck. The new project is expected to bridge that gap—especially in underserved northern states.
Broader Economic Impact
Apart from creating 100 direct jobs in Ajaokuta, the initiative is expected to establish three gas processing facilities in each of the 19 northern states. This will deepen energy access, promote industrial growth, and stimulate job creation across the region.
“Gas is not just cleaner and cheaper—it’s also more reliable,” Oluwagbemi added. “We must move away from our over-reliance on oil. The people of northern Nigeria deserve access to the same energy opportunities.”
Democratizing Access Through Mini LNG
He explained that the project leverages mini LNG technology, which liquefies gas in Ajaokuta before transporting it via trucks to inland locations. These virtual pipelines will then supply LCNG (liquefied-to-compressed natural gas) stations, where the gas will be converted for industrial and automotive use.
“This democratizes gas access,” he said. “With this model, even regions outside Nigeria—such as parts of the West African coast—can benefit.”
LNG Arete: Driving Gas Market Participation
LNG Arete Project Director, Hajara Pitan, emphasized the company’s commitment to deepening gas utilization in Nigeria. She noted that expensive infrastructure has long hindered growth in the gas sector, but mini LNG technology offers a cost-effective alternative.
“Our goal is to support the federal government’s drive to expand gas usage, especially in the North,” she said. “This project is not just about mobility CNG; it’s about enabling industrialization and creating jobs.”
Pitan also confirmed that the project is scheduled for completion within 12 to 16 months.
MOFI Signals Full Support
In his remarks, Executive Director at the Ministry of Finance Incorporated (MOFI), Tajudeen Ahmed, described the deal as a major breakthrough and affirmed MOFI’s full backing.
“This is the kind of sustainable, scalable, and economically viable project that aligns with our vision of driving investment in critical sectors,” he stated.
