Described by Nigerians from all walks of life as unprecedented, President Bola Tinubu will be performing the groundbreaking ceremony for five mini-LNG plants in Ajaokuta, Kogi State. NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, sheds light on the historic milestone and what it means for Nigeria’s gas-to-power aspirations, among other issues. Newscoven.com brings excerpts:
What is the wisdom behind the renewed focus on gas and power projects by the NNPCL?
As you know, Nigeria is blessed with abundant natural gas, estimated at about 209 trillion cubic feet (tcf). Therefore, there is the need to harness this natural gas for industries and to generate power to enable prosperity and economic growth. It is safe to say that NNPCL’s recent renewed vigour towards gas and power projects is informed by our unflinching commitment to support the Federal Government’s drive towards improving Nigeria’s power generation, engendering industrialisation and fostering economic growth and development.
Everywhere you go in this country today, there is that urgent necessity to utilise natural gas in establishing industries and providing power to spur economic growth, to create jobs for our teeming youth and to drive prosperity among Nigerians. Remember also that there has been a deliberate effort by the government to ensure that gas becomes an engine room for economic growth and development in the country. What we are doing is simple. We are deliberately keying into that agenda. And that is evident by the network of our gas pipeline infrastructure which is well-spread across the country.
Can you talk a bit more about some of these gas-to-power projects?
There are a lot of them. The Obiafu-Obrikom-Oben (OB3), Ajaokuta-Kaduna-Kano (AKK) and Escravos Lagos Pipeline Systems (ELPS) gas pipelines are clear examples. They are all geared towards deepening domestic gas utilisation. We are building massive infrastructure in-country to ensure that gas reaches every nook and cranny of this country.
Last year, Mr. President commissioned the second phase of the AHL gas processing plant, the 300mmscuf/d ANOH gas processing plant and the ANOH gas pipeline project. There are a few Independent Power Projects (IPP) that we are currently involved in too and we are working tirelessly with our partners to deliver them.
The Nigeria-Morocco Gas Pipeline (NMGP) is also another strategic project we are working hard to deliver on behalf of the Federal Government. This is a regional onshore and offshore gas pipeline intended to deliver natural gas resources from Nigeria to about 13 countries in West and North Africa and, eventually, to Europe.
We have recorded some impressive milestones towards advancing the 5,660 kilometres long project. In pursuing this project, we are bringing to the fore the strategic importance of the project to all the 13 countries involved and by extension to the entire African continent. We are confident that the US$25bn project will be pivotal in stemming energy poverty on the African Continent.
We are equally upbeat that all these gas pipeline projects will provide the necessary intervention required in revitalising manufacturing and other businesses across our industrial corridors and even beyond. We shall continue to deliver more strategic projects for the benefit of our country. We are not relenting until Nigeria attains the desired levels of industrialisation, power generation and economic prosperity.
We are also embarking on other initiatives which include the development of several gas-based industries in industrial hubs at strategic locations nationwide. This is also aimed at boasting fertiliser and chemical plants, among others.
Energy industry experts always talk about the difficulty in securing financing for projects, especially gas projects that require a lot of money to be executed. How have you been able to navigate this challenge?
Sure, funding is key in delivering these gas projects. In our own case, we try to let our partners understand the criticality of gas development for our country and the potential mutual advantages for both parties. A good example is our engagement with institutions like the African Export Import (Afrexim) Bank and the proposed Africa Energy Bank in financing a critical energy infrastructure such as the NMGP.
In our interactions with these financiers, we let them understand that we are partnering to provide the gas volumes required for the economic growth and development that this country urgently needs. So far, we have provided enough incentives, equity facilities and investment opportunities for investors. In some cases, we have even gone to the extent of securitising the products that would be transported through these pipeline networks.
Aside from these big-ticket gas pipeline projects, the NNPCL is involved in Compressed Natural Gas (CNG) and mini-Liquefied Natural Gas (LNG) projects. Is that move also part of the plan?
Yes, this is true. Considering the need to use gas as an alternative fuel for motorists across the country, we have since keyed into the Federal Government’s Presidential CNG Initiative (PCNGI). CNG is primarily used as a transportation fuel for buses, trucks, and some cars. It is also a useful fuel source for power generation. Experts will tell you that the use of CNG in automobiles is 40 per cent cheaper than using Premium Motor Spirit (petrol).
Last year, we inaugurated the 5.2mmscuf/d Ilasamaja (Lagos) CNG mother station. Recall also that the NNPC Retail Ltd inaugurated 11 CNG stations across various locations in Abuja and Lagos. We have been working with our partners to deliver 100 more CNG stations this year. These CNG stations represent a bold step in extending our CNG presence nationwide, and obviously in demonstrating our commitment to help diversify Nigeria’s energy mix.
Through more collaboration, we have partnered with players such as NIPCO Gas Limited and other players to build more state-of-the-art CNG stations across the country, all in continuation of our quest to expand the nation’s CNG infrastructure, improve access to CNG and accelerate the adoption of cheaper and cleaner alternative fuel for vehicles such as buses, cars, Keke NAPEP, etc.
This year, we shall take many more Final Investment Decisions (FIDs) to roll out additional CNG mother stations. We have also upgraded scores of CNG refuelling stations nationwide. All these efforts will significantly reduce the cost of transportation and engender sustainable national economic growth and development.
How about the Mini-LNG projects?
Like the CNG, the LNG is a cleaner-burning alternative to traditional fuels such as petrol and diesel. It is used in power plants to generate electricity, while industries use it as a fuel source for various processes requiring thermal.
Since last year, we have gone into strategic collaboration with our partners, signing various agreements for the development of gas projects in line with the Federal Government’s drive to deepen gas usage. The mini-LNG projects are some of these initiatives.
I am happy to inform you that this coming week, on the 30th of January 2025 specifically, we are holding the ground-breaking ceremony of five mini-LNG projects in Ajaokuta, Kogi State. Five mini-LNGs in one fell swoop! This is unprecedented in the history of Nigeria; it has never happened before. Under the theme “From Gas to Prosperity: Catalysing Nigeria’s Economic Growth”, the epic ceremony will see Mr. President performing the groundbreaking for brand new five mini-LNG projects namely: NNPC Prime LNG, NGML/Gasnexus LNG, BUA LNG, Highland LNG and LNG Arete.
Again, why am I referring to it as unprecedented? This is because it is virtually the first time such engagements would be held. Imagine taking five Final Investment Decisions (FIDs) and holding groundbreaking milestones on these multi-million-dollar projects! NNPCL is proud to have led this development, with significant private sector participation. If anything, this response clearly demonstrates the private sector’s positive response to Mr. President’s and NNPC’s vision on gas, which is aimed at fostering gas-fueled prosperity while making energy more accessible and affordable to our citizens.
What are the specifics of these projects?
The NNPC Prime LNG is a Small-Scale LNG (SSLNG) project aimed at supporting FGN’s policy on Gas. Located in Ajaokuta, Kogi State on a 33 hectare of land, the project has been established as a Special Purpose Vehicle (SPV) to drive the implementation of the project. The SPV is jointly owned by NNPC Trading Limited (NTL), a fully owned subsidiary of NNPC Limited and Silver Peaks Limited with equity holding of 90:10, respectively.
The NGML/Gasnexus LNG project involves the phased construction of a 20MMSCFD Mini-LNG plant with phase 1 being the development of a 7.5MMSCFD plant. Natural gas supplied via the existing Oben-Ajaokuta pipeline will be liquefied at the LNG facility, transported via CNG fuelled trucks (fitted with cryogenic tanks) and re-gasified at each customer location for use. The project aims to deliver a cost-effective, long-term, dedicated, secure and reliable natural gas solution to industrial and commercial customers.
The BUA LNG is a partnership between the NGML and BUA Industries Limited (BUA) to develop a 700TPD (using 35MMSCFD) Mini-LNG plant in Ajaokuta, Kogi State. Natural gas supplied via the existing Oben-Ajaokuta pipeline will be liquefied at the LNG facility, transported via CNG fuelled cryogenic trucks and regasified at BUA’s Sokoto Cement plant.
Highland LNG is also a Small-Scale LNG facility which will provide natural gas to industrial and commercial customers not connected to Nigeria’s pipeline network and support off-grid power generation under the Electricity Act 2023. The facility also supports the government’s push for gas as a transportation fuel through the Presidential CNG Initiative (PCNGi) by enabling LNG-to-CNG conversion via the LCNG process.
LNG Arete Ltd, is a fully Nigerian-Owned Company with top-tier experience and expertise spanning the entire oil and gas value chain. Incorporated under Nigerian law in March 2023, LNG Arete Ltd envisions providing clean and secure liquefied natural gas as a cost effective and accessible alternative energy source.
What is your message to Nigerians in the wake of this groundbreaking?
Our message is very clear: We remain committed to utilising our natural gas resources to bring affordable energy to Nigerians. While we execute some of these small scale mini-LNG projects (usually about 30mmscuf/d), we are also taking the lead in the Federal Government’s autogas initiative. We have also signed Memorandum of Understanding (MoUs) and project development agreements for floating LNG projects, another first in the country. So, many more good things from gas are coming.
All these initiatives are aimed at delivering turnkey gas solutions, equipment and infrastructure to the industrial, commercial, power generation, and automobile sectors. At the end of the day, we want to use gas to take us out of these challenges by providing access to electricity, clean cooking fuel, autogas and feedstock for other industries, thereby generating wealth and improving the wellbeing of Nigerians.
We will not relent in our renewed focus to leverage the nation’s gas assets to significantly generate value and opportunities for all Nigerians. The NNPCL will take in-country gas utilisation to unprecedented levels. This is the promise.
