Construction Starts on Five Mini-LNG Plants in Nigeria

A groundbreaking ceremony has been held for five mini-liquefied natural gas (LNG) facilities in the Nigerian state of Kogi.

“These Mini LNG facilities will ensure the efficient transportation of gas over long distances, providing a cleaner and cheaper source of energy to households, mobility, industries, and businesses”, Mele Kyari, chief executive of Nigerian National Petroleum Co. Ltd. (NNPC), told the ceremony, as quoted in a company press release. “This is particularly important for regions that currently lack access to gas pipeline infrastructure”.

NNPC holds stakes in three of the projects: 90 percent in Prime LNG, 50 percent in NGML/Gasnexus LNG and 10 percent in BUA LNG. The other two plants are LNG Arete and Highland LNG. The five will rise in the town of Ajaokuta.

“The Gasnexus/NGML 20MMSCFD [million standard cubic feet a day] small-scale LNG plant will be developed in phases, starting with the development of a 7.5 MMSCF/D facility that will utilize natural gas from the existing Oben-Ajaokuta pipeline to serve stranded customers in the North and other parts of the region”, the other partner in the project, Axxela Ltd., stated in a separate media statement.

NNPC and Axxela, a Lagos-based downstream player, recently received a gas distribution license for an installed capacity of 130 MMscfd. The license is for the Greater Lagos Industrial Area Gas Distribution Zone.

Axxela also received a 50-MMscfd license to sell gas in the Port Harcourt Cluster 2 Gas Distribution Zone, which covers the Greater Port Harcourt Area, according to another news release from Axxela on January 30.

NNPC is expanding its gas infrastructure to grow both its domestic and overseas reach in the sector. Nigeria’s 2020-30 “Decade of Gas” initiative aims to make gas the top fuel in the West African nation’s economic development.

Last year NNPC signed a deal with another local downstream firm to build a gas distribution facility with a capacity of 100 MMscfd in Kogi, in the North Central Region.

“The gas facility (city-gate) will enable natural gas supply to various domestic LNG facilities, CNG [compressed natural gas] compression and other facilities requiring gas in the Ajaokuta area”, NNPC said October 18, 2024.

NNPC simultaneously inked another agreement with the project partner, A4E Energy, to supply the latter five MMscfd over 10 years. A4E Energy, which according to NNPC is a homegrown midstream and downstream gas and renewable energy company, will use this gas in its CNG facility and CNG dispensing stations.

In a milestone, local energy engineering company UTM Offshore Ltd. received approval from Nigeria’s government last year for the country’s first floating LNG plant. The project, which will exploit the offshore Yoho field, has a planned capacity of 2.8 million metric tons a year, according to UTM Offshore.

“The project represents a significant step forward in Nigeria’s energy sector, enhancing the country’s ability to harness its untapped 209 trillion cubic feet of natural gas for both export and domestic consumption”, UTM Offshore said September 6, 2024.

Earlier in 2024 NNPC signed a project development agreement with Golar LNG Ltd. for the deployment of a floating LNG facility in Nigeria.

The deal with Bermuda-based Golar LNG “also outlines the monetization plan that will utilize approximately 400-500mmscf/d and produce LNG, LPG [liquefied petroleum gas] and condensate”, NNPC said June 11, 2024.

The FLNG will exploit “vast” proven gas reserves in shallow waters of the Niger Delta, NNPC said. Production is planned to start 2027.

To contact the author, email jov.onsat@rigzone.com