Latest Headlines
Nnpc and the Berthing of CNG Revolution

By Clement Obiora
In the aftermath of the removal of subsidy on petroleum products contained in his inaugural address in 2023, President Bola Ahmed Tinubu followed up this consequential policy shift with the launch of the Presidential Compressed Natural Gas Initiative (PCNGI) to cushion the adverse impact of the subsidy removal on Nigerians. The establishment of the Presidential CNG Initiative targets nationwide adoption of workshops for smooth transition to CNG-fueled vehicles. Described as a game changer by industry experts, the initiative is envisioned to transform the transportation ecosystem in the country; the first leg of the roll out targets over 11,500 new CNG-enabled vehicles and 55,000 CNG conversion kits for existing PMS-dependent vehicles. With an initial focus on mass transit systems and student hubs, the CNG initiative is transformative and provides the country with affordable alternatives to existing products and contributes significantly to the reduction of emissions and combating climate change.
Armed with the Presidential Initiative, dynamic vision, and an iron clad determination, the current management of NNPCL under the leadership of Mele Kyari has taken the lead in the deployment of Auto-CNG stations across the country. To enhance and strengthen its delivery capabilities, NNPCL struck a strategic partnership with NIPCO Gas Ltd. Working in close collaboration with NIPCO, NNPC Gas Marketing Ltd, a subsidiary of NNPCL, immediately developed an Auto-CNG rollout for the construction of thirty five CNG stations across the country.
By middle of last year, the collaborative efforts of NNPCL with NIPCO led to the commissioning of the first ever Compressed Natural Gas (CNG) stations in Abuja and Lagos, a significant milestone driving the country towards a more sustainable energy future. Already, this strategic partnership yielded the commissioning of 12 CNG stations to dispense Compressed Natural Gas (CGN) in the Federal Capital Territory (FCT) and Lagos These CNG stations are imbued with advanced reciprocating and hydraulic booster compressors, a feature that ensures a dispensing pressure of 200 bar for CNG vehicles. Within the FCT, the stations are located at Airport Road, Gwagwalada, Dutse-Bwari Road, Kubwa, Gaduwa, Olusegun Obasanjo Way, Zone 1 and Dei-Dei whereas in Lagos, the stations are located at Mobile Way, Apapa, Lekki-Epe expressway, Lateef Jakande, Agidingbi and Mushin.
The NNPC and NIPCO partnership is also set to deliver 35 state-of-the-art CNG stations nationwide; the strategic locations of these stations in Abuja and Lagos are offering CNG to a wide range of CNG vehicles including cars, buses, heavy transport vehicles and tricycles. Arrangements have been perfected to supply CNG to stations in Lagos and Abuja from mother stations in Ibafon, Ogun State, and Ajaokuta, Kogi State. On completion of the AKK Pipeline Project, the Abuja station is expected to be connected to it. The aim of the partnership is to reduce the need for fuel importation; it is envisaged to substantially leverage domestically produced natural gas and, in the process, reduce transportation costs. This will foster economic growth at the national level.
The leadership role of NNPC in expanding the country’s Compressed Natural Gas Infrastructure, improve access to CNG and accelerate the adoption of a cheaper and cleaner alternative is not an accident of history nor was it foisted on the current management by a Presidential directive. Before the announcement of the Presidential CNG Initiative, Mele Kyari was an unrepentant advocate of the transformative capacity gas in the emergent economies of the 21st century.
A ceaseless campaigner and gas champion, at different fora, Kyari advised for the implementation of pro-gas policies that will leverage Nigeria’s abundant natural gas resources to deliver advantages to citizens. He has not been merely talking; he has continued to walk the talk. As the visioner at the helm of NNPCL, he has focused heavily on the gas sector as a focal point of the economic diversification strategy of government. His concerted effort achieved the Final Investment Decision on the NLNG Train 7 Project, which was on the drawing board for over 10 years before he mounted the saddle. On completion, the project is expected to generate over $20 billion of revenues to the government, 10,000 direct jobs, and 40,000 indirect jobs. Kyari has also spearheaded the flag-off of the construction of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project, an integral part of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2billion cubic feet of gas per day. Under his guidance, NNPC commissioned the Oredo Integrated Gas Handling facility (IGHF) and the Liquefied Petroleum Gas Storage and Dispensing Unit.
He threw his weight fully behind Autogas initiative, a percussor to the current Presidential CNG Initiative; it was driven by Dipreye Sylva, the former Minister of State and envisioned to provide an alternative to Premium Motor Spirit (petrol) as the sole automotive fuel in order to reduce the huge importation bill of the product. Under his guidance, NNPC executed a JV agreement with NIPCO to help in the marketing and distribution of the product to encourage as many Nigerians as possible to migrate to the use of gas as automotive fuel. Mele Kyari has worked tirelessly to make the Brass Gas Hub a reality. In 2021, he led NNPC to take the Final Investment Decision (FID) with the Brass Fertilizer and Petrochemical Company for the $3.6 billion Brass Methanol Plant located at Odioma, Bayelsa; NNPC under his leadership also signed a $260m financing agreement for the Assa-North Ohaji South (ANOH) Gas Project with Seplat which is expected to deliver 300 million standard cubic feet of gas per day and 1,200 megawatts of electricity to the domestic market. NNPC, on April 22, 2021, executed a Gas Development Agreement (GDA) for the Oil Mining Lease (OML) 143 with its partner, Sterling Oil Exploration and Production Company (SEEPCO). On completion, the project is expected to boost the nation’s gas production by 1.2 trillion cubic feet (tcf).
With an indelible imprint on Nigeria’s progress in the development of its gas infrastructure, it is not surprising that Kyari is overly enthusiastic and fully committed to the full and robust implementation of the current Presidential CNG Initiative. His declaration that the ongoing drive to bring Compressed Natural Gas (CNG) closer to Nigeria is irreversible underscores an unwavering commitment to deliver on President Tinubu’s marching orders. To Kyari, the gains of CNG and its transformative capacity are too enormous to ignore. Migration to CNG is cost effective; its price is 40 percent cheaper than PMS with a cost advantage that can translate into substantial savings for both transport operators and consumers. Commercial vehicles account for about 80 per cent of current petrol demand in the country; the potential use of CNG will reduce transport costs by an estimated 70 per cent and will deliver 40 per cent savings to car owners.
Compared to petrol powered vehicles, it has been proven that CNG vehicles are prone to less wear and tear, leading to long-lasting use and reduced need for repairs. Lower maintenance costs will benefit Nigerian commercial transporters and private users. High carbon emissions from vehicles are one of the major sources of pollutants like carbon monoxide, which degrade air quality and constitute health problems. CNG has a lower carbon footprint compared to fossil fuel, and by switching to its use, Nigeria can reduce its greenhouse gas emissions. The embrace of CNG by Nigerians will assist the government in combatting climate change and achieving the United Nations Sustainable Development Goals (SDGs) related to clean energy and climate action (SDG 7) and (SDG 13). The proliferation of the CNG Initiative presents business opportunities for different segments of the business class; both local and foreign investors.
The construction and operation of CNG filling stations, pipelines and distribution network development, CNG storage, and transportation facilities are different segments investors can explore. Equally important, the use of CNG for transport will reduce the country’s fuel imports by 5.5 billion liters and save $4.4 billion every year. The potential of CNG adoption and use for job generation is high; it will lead to the establishment of CNG conversion centers and refueling stations within the value chain. This will create jobs for gas engineers, CNG conversion technicians, and CNG equipment manufacturers. These activities will create economic growth and numerous job opportunities for Nigerians who will play various supply chain roles.
•Clement Obiora, an investment banker, contributed this installment from Falomo, Ikoyi Lagos.