FG $27.3M Gas Deal Set to Transform Northern Nigeria

By Achimi Muktar

In a bold move to reshape Nigeria’s energy landscape and cut transportation costs across the north, the Federal Government, through its Presidential Compressed Natural Gas Initiative (P-CNGi), has sealed a $27.3 million deal with LNG Arete Ltd. to build a game-changing mini liquefied natural gas (LNG) plant in Ajaokuta, Kogi State.

The agreement, signed on Friday, marks a pivotal moment for the nation's push toward affordable, cleaner energy and comes as gas demand for transport, industry, and households continues to skyrocket—especially in underserved northern regions.

With a planned processing capacity of seven million standard cubic feet per day (MMSCFD), the project is co-financed by three major players: P-CNGi ($6 million), LNG Arete ($12 million), and the Midstream and Downstream Gas Infrastructure Fund under the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

“This is not just another plant; it’s a transformative hub that will unlock stable, cost-effective energy access for millions,” said Michael Oluwagbemi, the programme director and CEO of P-CNGi. “More than 100 jobs will be created. This is real, measurable impact.”

Designed to be operational within 12 to 16 months, the plant aims to liquefy natural gas for wider distribution, which will then be converted to compressed natural gas (CNG)—a safer, cheaper, and cleaner alternative for powering vehicles, industries, and even homes.

For Northern Nigeria, which has long suffered from a lack of access to energy infrastructure, this plant is set to be a game-changer.

“The logistics of moving food and goods will become cheaper. Textile, agriculture, and manufacturing industries will see reduced operational costs. And eventually, we’ll see LNG trucks moving Nigerian products as far as Ghana and Senegal,” Oluwagbemi added.

He emphasized that the facility complements the ongoing Ajaokuta-Kaduna-Kano (AKK) gas pipeline project spearheaded by the Nigerian National Petroleum Company Limited (NNPC Ltd.), which aims to connect gas-rich southern Nigeria to the power-hungry north.

At the signing, Hajara Pitan, project director at LNG Arete, credited the Tinubu administration and key stakeholders for breathing life into a long-overdue energy dream.

“For years, the gas sector was stunted by high infrastructure costs. But now, mini-LNG technology is lowering the entry barrier and empowering local companies to play big,” Pitan said. “With this plant, we’re not just liquefying gas—we’re unleashing potential.”

The facility is expected to play a critical role even after northern Nigeria is fully piped with natural gas. LNG trucks, more efficient than their CNG counterparts, will continue to serve regional and international markets, making Nigerian exports more competitive and fueling cross-border commerce.

As the nation battles with energy poverty and soaring fuel prices, this $27.3 million gas deal might just be the spark needed to ignite an energy revolution—one powered by Nigerian gas, Nigerian innovation, and Nigerian resolve.