Why NNPC’s renewed focus on gas and power projects
Nigeria is blessed with abundant natural gas resources estimated at about 209 trillion cubic feet (tcf). Therefore, there is need to harness this for industries and power generation, for prosperity and economic growth.
NNPC Limited’s recent renewed vigour towards gas and power projects is informed by its unflinching commitment to support the Federal Government’s drive towards improving Nigeria’s power generation, engendering industrialization 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, create jobs for our teeming youth and drive prosperity among Nigerians. There has been a deliberate effort by the government to ensure gas becomes the energy for economic growth and development in the country. What NNPC is doing is simple -deliberately key into that agenda. And that is evident by the network of gas pipeline infrastructure by the company across the country.
Some of the gas-to-power projects.
There are lots of them, including the Obiafu-Obrikom-Oben (OB3), Ajaokuta-Kaduna-Kano (AKK) and Escravos Lagos Pipeline Systems (ELPS) gas pipelines as clear examples. They are all geared towards deepening domestic gas utilisation. NNPC is building massive infrastructure in-country to ensure that gas reaches every nook and cranny of this country.
Last year, the second phase of the AHL gas processing plant, the 300mmscuf per day ANOH gas processing plant, and the ANOH gas pipeline projects were commissioned. Also, a few Independent Power Projects (IPP) are currently involved. NNPC is working with its partners to deliver these projects.
The Nigeria-Morocco Gas Pipeline (NMGP) is also another strategic project the company is 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.
NNPC has recorded some impressive milestones towards advancing the 5,660 kilometres long project to bring to the fore its strategic importance to all the 13 countries involved, and by extension to the entire African continent. NNPC is confident the $25bn project will be pivotal in stemming energy poverty on the African continent.
NNPC is 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. NNPC is determined to deliver more strategic projects for the benefit of the country until Nigeria attains the desired levels of industrialisation, power generation and economic prosperity.
The company is embarking on other initiatives, include the development of several gas-based industries in industrial hubs at strategic locations nationwide also aimed at boasting fertiliser and chemical plants, among others.
How NNPC is handling the challenge of securing financing for gas projects.
unding is key in delivering these gas projects. NNPC tries to let its partners understand the criticality of gas development for Nigeria and the potential mutual advantages for both parties. A good example is NNPC’s 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 the company’s interactions with these financiers, they are made to understand that NNPC is partnering with them to provide the gas volumes required for the economic growth and development the country urgently needs. So far, NNPC has provided enough incentives, equity facilities and investment opportunities for investors. In some cases, the company has even gone to the extent of securitising the products that would be transported through these pipeline networks.
Other big-ticket gas pipeline projects, like Compressed Natural Gas (CNG) and mini-Liquefied Natural Gas (LNG) projects NNPC Ltd is involved as part of the plan
Considering the need to use gas as an alternative fuel for motorists across the country, NNPC has 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 say the use of CNG in automobiles is 40 percent cheaper than using Premium Motor Spirit (petrol).
Last year, NNPC inaugurated the 5.2mmscuf/d Ilasamaja (Lagos) CNG mother station. Also, the NNPC Retail Ltd inaugurated 11 CNG stations across various locations in Abuja and Lagos. The company has been working with its partners to deliver 100 more CNG stations this year. These CNG stations represent a bold step in extending the company’s CNG presence nationwide, and obviously in demonstrating its commitment to help diversify Nigeria’s energy mix.
Through more collaboration, NNPC has 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 its 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, NNPC will 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.
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, NNPC has gone into strategic collaboration with its 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.
This week, on the 30th January 2025 specifically, NNPC will hold the ground-breaking ceremony of five mini-LNG projects in Ajaokuta, Kogi State in one fell swoop! This is unprecedented in the history of Nigeria. Under the theme “From Gas to Prosperity: Catalysing Nigeria’s Economic Growth.” The new mini-LNG projects are NNPC Prime LNG, NGML/Gasnexus LNG, BUA LNG, Highland LNG and LNG Arete.
These are 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! The NNPC Ltd is proud to lead this development, with significant private sector participation. If anything, this response clearly demonstrates the private sector’s positive response to NNPC’s vision on gas, aimed at fostering gas-fueled prosperity, while making energy more accessible and affordable to our citizens.
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 equity stakes 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.
Message to Nigerians.
NNPC’s message is very clear: NNPC remains committed to utilising Nigeria’s natural gas resources to bring affordable energy to Nigerians. While NNPC will execute some of these small scale mini-LNG projects (usually about 30mmscuf/d), it will also take the lead in the Federal Government’s autogas initiative. NNPC has 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, NNPC wants to use gas to take the country 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. NNPC will not relent in its renewed focus to leverage the nation’s gas assets to significantly generate value and opportunities for all Nigerians. The NNPC Ltd will take in-country gas utilisation to unprecedented levels. This is the promise.
