NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company Limited (NNPC), is set to acquire a 5.2 million standard cubic feet per day Compressed Natural Gas (CNG) compression and refuelling facility from Gas Network Services Limited (GNSL).
This development, disclosed in a merger and acquisition notice issued by the Federal Competition and Consumer Protection Commission (FCCPC), marks a significant move towards expanding Nigeria’s CNG infrastructure and improving access to cleaner energy alternatives.
GNSL, the current operator of the facility, specializes in providing virtual pipeline solutions by compressing natural gas and delivering it to industrial and commercial customers via mobile tube trailers.
The facility also includes dispensing points for refuelling natural gas vehicles (NGVs), catering primarily to clients outside the reach of traditional pipeline networks.
A boost for the government’s CNG initiative
By acquiring the facility, NGML aims to bolster its role in the marketing and distribution of natural gas across Nigeria.
- The transaction is expected to strengthen the CNG market by increasing infrastructure capacity, making CNG more accessible and affordable, particularly for the transport and commercial sectors.
- The acquisition aligns closely with the objectives of the Presidential Compressed Natural Gas Initiative (P-CNG Initiative), launched in August 2023.
- The Initiative was introduced to cushion the impact of fuel subsidy removal and reduce energy costs nationwide by promoting the adoption of CNG as a cleaner and cheaper alternative to traditional fuels.
- NGML’s move is seen as a strategic step towards accelerating the rollout of CNG infrastructure across the country, supporting national efforts to foster a more sustainable and cost-effective energy landscape.
The FCCPC noted that the transaction could have a significant impact on the competitive dynamics of the CNG market, but ultimately promises to benefit consumers through expanded access to cleaner energy solutions.
What you should know
- As part of government’s efforts to boost the country’s CNG capacity, the Presidential Compressed Natural Gas Initiative (P-CNGi) and LNG Arete Ltd. recently signed a pivotal Memorandum of Understanding (MoU) for a $27.3 million gas plant project aimed at expanding compressed natural gas (CNG) infrastructure across Northern Nigeria.
- The is aimed at addressing the region’s long-standing energy challenges, particularly in the transportation and industrial sectors, which have struggled with limited access to reliable and affordable energy.
- Recall that President Bola Tinubu established the P-CNGi in August 2023 to revolutionize the transportation landscape in the country, targeting over 11,500 new CNG-enabled vehicles and 55,000 CNG conversion kits for existing PMS-dependent vehicles.
- The initiative is also expected to boost local manufacturing and assembly of conversion kits while creating jobs for the country’s populace.
