FG signs $27M deal for Ajaokuta LNG project 

The federal government, through the Presidential Compressed Natural Gas Initiative (PCNGI), has signed a $27 million deal with the LNG Arete to develop a Liquified Natural Gas (LNG) project in Ajaokuta, Kogi State.

This project according to the parties will aid the transportation of gas to other parts of the country, especially the North.

Speaking during the signing ceremony in Abuja on Friday, Micheal Oluwagbemi, programme director of PCNGI, noted that LNG Arete limited have gone through various processes and committed about $12 million as counterpart funding for the project, BusinessDay reports. 

According to Oluwagbemi, the project is expected, in total, to take about $27.3 million, of which $6 million is being provided by the PCNGI. He announced that the completion period for the project is 12 to 18 months, adding that equipment required were already available.

“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 ones that have already done their own work, developed their project, they have identified sources of funding that can plod 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 3mm scope if we don’t come in but now it’s 7mm scope 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 explained that despite the abundant gas resources in the country, the constraint has always been how not just produce it, but how to distribute it.

According to him, Nigerians, since the introduction of the programme, has expressed confidence as well as embraced President Tinubu’s mandate of leveraging gas resources for transportation, as well as other critical sectors.

He said that the need to ensure Nigerians enjoy the benefits of cheaper, cleaner, safer, more reliable gas has driven the PCNGI to look for immediate solutions that are sustainable.

“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, have 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,” he added.

In her remarks, Hajara Pitan, project director LNG Arete, said that the project will deepen Nigeria’s participation in the gas market. She noted that the major reason for lack of development of the gas sector has been the fact that infrastructure in gas is expensive.

“But with the mini LNG technology, we’re able to 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.