The Federal Government has inaugurated a 5.2 million standard cubic feet per day (mmscfd) Compressed Natural Gas (CNG) plant in Lagos in an attempt to offer alternative fuel sources and mitigate the effects of petrol subsidy removal.
This is contained in a statement by the spokesperson of the Nigeria National Petroleum Corporation Limited (NNPCL), Olufemi Soneye, on Thursday in Abuja.
Soneye said that the NNPCL is planning to introduce six new plants across the country to alleviate the energy costs associated with the removal of the fuel subsidy.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, inaugurated the plant in the Isolo Industrial Area, Ilasamaja, Lagos, on Thursday.
He stated that the event themed, “From Gas to Prosperity: CNG for All,” marks a pivotal moment in the advancement of affordable, sustainable, and secure energy sources in the country.
What the minister is saying
“Although the elimination of the Premium Motor Spirit (PMS) subsidy has brought difficulties, it has also given us a once-in-a-lifetime chance to invent and adopt more economical, efficient, and sustainable energy alternatives.
“CNG as a transport fuel is a mature technology used globally, as it is the cleanest burning fuel in terms of Nitro-oxide and soot emissions.
“While it can be employed to power passenger cars and city buses, CNG passenger vehicles emit 5-10% less CO2 than comparable gasoline-powered passenger vehicles,” Ekpo said.
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In his remarks, the GCEO of NNPC Limited, Mallam Mele Kyari, announced that to ensure energy security and increase access to CNG for Nigerians, NNPCL has finalized an investment decision with Axxela Limited.
According to Kyari, this partnership will establish six CNG mother and service station plants, each with a capacity of 5.2 mmscfd, strategically located across the six geopolitical zones, including the Federal Capital Territory (FCT), to facilitate easier access to bulk CNG.
He added that this initiative complements NNPCL retail’s gradual introduction of CNG in over 100 stations nationwide, along with other Joint Venture collaborations focusing on CNG.
He said the Petroleum Industry Act (PIA) explicitly mandates NNPCL to promote domestic gas utilisation, thereby strengthening the company’s resolve to deploy critical gas infrastructure projects across the country.
“NNPC will continue to deliver more strategic projects for the benefit of our country. We shall utilise our gas resources for industrialisation, power generation and economic prosperity for all,” Kyari added.
Backstory
Following the removal of the fuel subsidy on May 29, 2023, President Bola Ahmed Tinubu inaugurated the Presidential CNG Initiative in October of the same year to provide more affordable, safer, and environmentally friendly energy.
This initiative focuses on supplying compressed natural gas primarily for mass transit.
To alleviate the burden of rising fuel prices on the public, the Federal Government allocated N100 billion from the N500 billion palliative budget to buy 5,500 CNG vehicles (buses and tricycles), 100 electric buses, and over 20,000 CNG conversion kits.
This funding also encourages the development of CNG refilling and electric charging stations, he said.
Furthermore, the private sector backed the initiative with more than $50 million in real investments towards refuelling stations, conversion centres, and mother stations.