In the drive to provide a cost-effective alternative to Premium Motor Spirit (PMS), the Compressed Natural Gas (CNG) sector in Nigeria has seen a major investment boost, attracting N80 billion in just one week in October 2024.
This revelation came from the Chief Executive Officer of the Nigeria Presidential Compressed Natural Gas Initiative (P-CNGI), Michael Oluwagbemi, during an interview with The Nation.
Oluwagbemi emphasised the rapid growth of the CNG sector, recalling that by September 2024, the initiative had already attracted $175 million in investments.
“If I count that investment, we have gone up by N80 billion in the last one week. You say what the update is, I am adding that N80 billion to $175 million of September, and that is another extra $16 million that will be added to the $175 million,” he said.
This massive influx of capital comes at a critical time, as Nigerians face rising PMS prices, with CNG emerging as a key alternative energy source.
Oluwagbemi highlighted that four of the six companies recently awarded N122 billion by the Midstream and Downstream Gas Infrastructure Fund (MDGIF) for gas development projects were focused on CNG infrastructure.
Alongside financial gains, the initiative, he stressed, was already creating significant employment opportunities.
“The development of the CNG market has created jobs for 20,000 people across the country,” Oluwagbemi revealed.
Additionally, CNG conversion centers have exceeded targets, with 125 centers in operation, surpassing the original goal of 100 for the year.
“This time last year, the country had just seven conversion centers, and we promised we would deliver at least 100. Already, we have well over 125,” he said.
The CNG programme, initially designed to roll out vehicles within 15 to 18 months, has adjusted its strategy to accelerate the process by engaging local manufacturers, partially driven by global supply chain challenges stemming from the Israel-Palestine conflict.
Oluwagbemi noted that gas availability remains a challenge at conversion centers, but P-CNGI is collaborating with the private sector and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to develop innovative solutions.
“We are working with the private sector to come up with innovative solutions like the mobile refueling units,” he said.
While 10 states have activated CNG infrastructure, other regions face delays due to limited gas infrastructure.
However, Oluwagbemi is optimistic, predicting that by the end of 2024, 18 states will be fully activated, with additional progress expected in October.
Addressing the challenges in the northeast and northwest, where the lack of gas pipelines hinders CNG development, Oluwagbemi mentioned ongoing plans to connect these areas to the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project.
“Primarily, it is the availability of gas infrastructure. We are talking about the far northeastern and northwestern states where there is no gas pipeline for distribution, and that is the main impediment,” he said.
With the Nigerian government’s backing and the private sector’s growing interest, the CNG sector is positioned to reshape Nigeria’s energy landscape, providing a sustainable alternative to PMS while creating jobs and attracting significant investments.
*This piece was written by Affiong Bassey