Ardova, Diadem Move to Take Full Control of Powergas in Major CNG Deal

.Consortium targets 100 CNG stations, expands gas infrastructure as Nigeria pushes domestic gas utilisation

Michael Olugbode in Abuja

Ardova Plc and Diadem Energy have moved to acquire 100 per cent of Powergas, one of Africa’s largest compressed natural gas producers and virtual-pipeline operators, in a transaction that could reshape the distribution of CNG to industries, power users and motorists across Nigeria.

The proposed acquisition will bring together Powergas’ gas compression infrastructure and customer base, Diadem Energy’s virtual-pipeline logistics operations and Ardova’s nationwide retail and distribution network, creating an integrated platform aimed at expanding access to domestic natural gas beyond the country’s conventional pipeline grid.

Diadem Group announced on Thursday that Diadem Energy, its energy subsidiary, and Ardova had agreed to acquire Powergas Global Investments Nigeria Limited and Powergas Ebedei Limited from Africa Infrastructure Fund I, managed by A.P. Moller Capital, through its investment vehicle Impala Energy Holdings.

The transaction, first announced by A.P. Moller Capital and Ardova on September 25, is expected to close around the end of 2026, subject to regulatory and other third-party approvals.

The deal comes as Nigeria seeks to increase domestic gas utilisation and expand compressed natural gas as an alternative fuel for transportation and industrial users, amid efforts to reduce dependence on more expensive conventional fuels.

Under the proposed enlarged platform, Ardova said it intends to deploy CNG infrastructure across its retail network and is targeting 100 CNG refuelling sites nationwide within 24 months, potentially widening access to gas for commercial fleets and motorists.

The company also plans to expand Powergas’ compression capacity across viable gas-producing corridors, creating additional offtake for associated and non-associated gas while supporting the monetisation of gas that might otherwise be flared.

The consortium’s strategy effectively connects three critical stages of the gas value chain: Powergas will provide compression and gas production infrastructure, Diadem will provide virtual-pipeline transportation, while Ardova will leverage its national distribution and retail network to take CNG closer to end users.

Diadem Group Chairman, Dr George Eluwa, said the company’s existing relationship with Powergas had given it first-hand experience of the potential of transporting natural gas beyond fixed pipeline networks.

“Powergas compresses it, Diadem moves it, and Ardova brings it within reach of customers across Nigeria,” Eluwa said, adding that the consortium sought to create a platform capable of delivering what he described as cleaner and more affordable energy to industries, fleets and communities.

For Ardova, the acquisition represents an expansion beyond its established petroleum-products and LPG businesses into a broader domestic gas infrastructure platform.

The company’s Executive Chairman, Dr AbdulWasiu Sowami, said the country’s next phase of energy development would be built around gas and at greater scale.

“Powergas has built the compression backbone required to take natural gas beyond the conventional pipeline grid. Ardova brings a national distribution network, deep customer relationships and the ability to invest for the long term,” Sowami said.

He said the consortium intended to connect Nigeria’s gas resources to industry, power and transportation while supporting the Federal Government’s Presidential Initiative on Compressed Natural Gas and Electric Vehicles and its Decade of Gas programme.

Ardova Managing Director, Dr Abiola Babatunde-Ojo, said the immediate priority after completion would be execution, including expanding compression capacity, integrating CNG into the company’s retail network and connecting more industries and fleets to domestic gas.

The transaction also has implications for Nigeria’s efforts to reduce gas flaring by creating additional commercial outlets for gas produced in areas where conventional pipeline infrastructure is limited.

Powergas was founded in 2013 by Clean Energy Group to develop a model for supplying natural gas to customers beyond the reach of fixed pipelines through compression facilities and road-based virtual pipelines.

Its Ebedei flare-gas monetisation project was subsequently developed with investment from A.P. Moller Capital, while Powergas Ebedei Limited commenced operations in 2020 and was commissioned in 2021.

A.P. Moller Capital invested in Powergas Ebedei through Impala Energy Holdings in 2019, supporting the company through development, construction, commissioning and operational expansion.

Powergas has since expanded distribution across the South-East, South-South and South-West, according to the transaction announcement, operating four mother stations and a fleet of more than 250 tube skids.

Diadem Energy, meanwhile, has been Powergas Ebedei’s virtual-pipeline logistics partner since 2022, transporting compressed natural gas by road to industrial customers beyond the conventional pipeline network.

The company said its fleet completed more than 6,500 trips covering over 2.7 million kilometres in 2025 alone, underscoring the logistical scale required to move compressed gas to customers outside the existing pipeline system.

Following completion of the acquisition, the consortium plans to build on that infrastructure by expanding compression capacity and distribution into additional gas-producing corridors.

The longer-term ambition is not limited to Nigeria. Ardova said it intends eventually to extend the platform into the wider West African market.

Powergas Vice-Chairman, Pulak Sen, said the company’s original concept was to take natural gas “beyond the pipeline”, adding that the combination of Powergas’ compression infrastructure with Ardova’s national reach could enable expansion into new markets and support Nigeria’s auto-gas ambitions.

A.P. Moller Capital Managing Partner and Chief Executive Officer, Kim Fejfer, said the proposed sale represented the culmination of the fund’s investment in developing Powergas into an operational CNG business capable of supplying industrial and commercial customers beyond the conventional pipeline network.

A.P. Moller Capital Partner, Sam Senbanjo, said the business had progressed from development to a fully operational CNG platform since the fund’s 2019 investment.

The proposed acquisition comes at a time when Nigeria is seeking to increase the use of its abundant natural gas resources domestically, particularly in transportation and industry.

The federal government’s CNG programme is designed to expand the use of gas-powered vehicles and reduce transportation costs, while the Decade of Gas initiative seeks to accelerate gas investment, infrastructure development and domestic utilisation.

Beyond transportation, the new platform could also provide an expanded route to market for gas producers, particularly in locations where conventional pipeline infrastructure is unavailable or commercially impractical.

The consortium said the enlarged business would seek to become a major domestic gas infrastructure and gas-monetisation partner for upstream producers, while creating additional demand for both associated and non-associated gas.

However, the transaction remains subject to customary closing conditions and required regulatory approvals. Until completion, Powergas remains under its existing ownership structure.

Standard Bank and FirstCap advised Ardova and Diadem Energy, while Charis & Mettle and Bloomfield LP served as legal advisers and Andersen provided tax advice. Esogra Engineering acted as technical adviser.

Citi advised Powergas, while Norton Rose Fulbright served as legal counsel.

For Nigeria’s gas market, the proposed acquisition represents a significant attempt to link gas production, compression, road transportation and retail distribution within a single expanding platform.

If completed as planned, the consortium will be betting that the next major phase of Nigeria’s energy transition will depend not simply on producing more gas, but on building the infrastructure required to move it economically to the millions of industrial, commercial and transport users currently beyond the conventional pipeline network.