By Ayomide Otitoju
The Nigerian National Petroleum Company Limited (NNPCL) has announced a strategic partnership with a local downstream company to establish a natural gas distribution facility in Kogi State, with a capacity of 100 million cubic feet per day (MMcfd). This initiative aims to bolster the country’s natural gas infrastructure and enhance domestic supply.
According to NNPCL’s statement, the “city-gate” facility will provide natural gas to domestic LNG plants, compressed natural gas (CNG) compression stations, and various industries in the Ajaokuta area. The agreement was made possible through NNPC Gas Marketing Ltd. (NGML), a subsidiary of NNPCL.
As part of the initiative, NGML has signed a separate agreement with A4E Energy, a local midstream and downstream gas and renewable energy firm. Under this deal, NNPC will supply A4E with five MMcfd over the next decade, which will be utilized to power CNG facilities and dispensing stations.
This project is aligned with Nigeria’s “Decade of Gas” initiative (2020–2030), which seeks to position natural gas as a primary driver of the nation’s economic growth. NNPCL is actively working on expanding its gas infrastructure, including international collaborations.
In late 2023, NNPCL partnered with UTM Offshore Ltd. and the Delta State government to construct Nigeria’s first floating LNG plant, expected to have a capacity of 176 MMcfd and draw resources from the offshore Yoho field. Additionally, earlier this year, NNPCL reached an agreement with Bermuda-based Golar LNG Ltd. to develop another floating LNG facility, aimed at producing LNG, LPG, and condensate from the extensive gas reserves in the Niger Delta.
Furthermore, NNPCL is exploring potential LNG exports to South Korea in discussions with a South Korean consortium, as part of broader efforts to attract foreign investment and align with the economic objectives of President Bola Ahmed Tinubu’s administration, which aims to establish Nigeria as a global investment destination.
Domestically, NNPCL is making progress in promoting CNG as a cost-effective and environmentally friendly alternative to petrol. The company plans to establish over 100 CNG stations nationwide by next year. Huub Stokman, Managing Director of NNPC Retail Ltd., highlighted that CNG will be approximately 40% cheaper than petrol in Nigeria.
With substantial natural gas reserves estimated at 209.3 trillion cubic feet as of 2024, Nigeria has experienced a modest annual growth rate of 0.3% in natural gas production over the past decade. These investments and partnerships are expected to enhance Nigeria’s standing in the global gas market while providing affordable energy solutions domestically.
