The Federal Government of Nigeria has signed a $27.3 million deal with LNG Arete to build a mini Liquefied Natural Gas (LNG) plant in Ajaokuta, Kogi State. The agreement, signed on Friday in Abuja, is aimed at boosting the supply of gas to various parts of the country, particularly the northern region.
The project is being driven by the Presidential Compressed Natural Gas Initiative (PCNGI), under the leadership of Michael Oluwagbemi, who is the Programme Director and Chief Executive. He explained that LNG Arete has already committed $12 million as its contribution, while the federal government, through PCNGI, is providing $6 million.
According to Oluwagbemi, the total cost of the project is $27.3 million, and it is expected to be completed within 12 to 18 months. He noted that the necessary equipment is already available, which will help speed up the construction process.
Speaking at the event, Oluwagbemi said the government is not only funding part of the project but also offering support to ease the process through fast-track permits and easier gas allocation.
“This is the kind of partnership we want with the private sector—partners who already have something on the ground and just need support to scale,” he said.
He also pointed out that Nigeria is rich in gas, but the main challenge has been distribution. The mini LNG plant is expected to help move gas to areas currently cut off, particularly in northern Nigeria.
“Nigerians have shown faith in President Bola Tinubu’s plan to use gas not only for transportation but also in other important sectors. This project will help deliver cheaper, safer, and more reliable gas,” Oluwagbemi added.
The government hopes the project will help reduce dependence on petrol and diesel, support CNG (Compressed Natural Gas) mobility, and promote industrial growth.
Also speaking at the event, Hajara Pitan, Project Director at LNG Arete, said the company’s goal is to increase Nigeria’s role in the gas sector.
She explained that gas infrastructure is usually costly, but the mini LNG plant offers a cheaper and quicker alternative. According to her, the plant will also help create jobs and support industrialisation, especially in underserved parts of northern Nigeria.
“This project is a big step toward making gas more available across Nigeria. We’re looking at completing it within 12 to 16 months, and it will support CNG transport and youth employment,” she said.
The agreement marks another move by the Tinubu administration to diversify Nigeria’s energy sources and strengthen economic development through the use of cleaner energy.
