NNPC Limited CNG Projects: Making The Right Moves At The Right Time

By Adewole Kehinde

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion”.Jack Welch

The Nigerian National Petroleum Company Limited (NNPCL) announced on Thursday, August 3, 2023, its partnership with NIPCO Gas Limited to develop Compressed Natural Gas (CNG) stations in the country.

I was so happy to hear that because, since the removal of subsidy, transportation fares have gone up about 200%, especially for those traveling from the South to the North.

Nigeria is endowed with over 200 Trillion Cubic Feet (TCF) of proven natural gas reserves, from which numerous economic values such as gas-to-power, petrochemicals, fertilizer industries, and the transport sector using CNG are ordinarily derivable.

Compressed Natural Gas (CNG), otherwise known as CNG, is not new to the Nigerian energy ecosystem, but it will be the next subject to be accommodated by Nigerian energy consumers.

Besides its great benefits, this energy source will help reduce Greenhouse Gas emissions and be the solution that most Nigerians are craving at this hard time of petrol subsidy removal.

Compressed Natural Gas is natural gas in compressed form. It becomes lighter than air after compression, usually about one percent of its original volume. CNG is safe and clean, given its non-toxic and non-corrosive nature. It is also tasteless, colorless, and odorless.

It comprises mainly hydrocarbon gases and vapour and contains predominantly methane. It is a by-product of coal mining or comes from crude oil production.

After extraction, it is stored in thick-walled high-pressure tanks, and this pressure is usually around 200 to 250 bar. CNG is often transported in these thick-walled tanks or pipelines.

CNG is mostly used to generate energy (heating or fueling). Compressed Natural Gas is an effective and efficient way of fueling.

The benefits of this source of energy are both pocket-friendly and climate-friendly.

Unlike petrol and diesel, CNG releases a smaller amount of greenhouse gas. Hence, it is described as cleaner energy compared to the former. There is a 70% reduction in GHG emissions when CNG is used instead petrol or diesel.

Several other benefits include safe fuel, a high auto-ignition temperature, low operation costs, dual facilities, and increased oil life. You can read about all of these here, and there are also more insights into the benefits.

Some have raised the issue of safety, but I can allay the fears because CNG is safer to use as it reduces GHG emissions by 70%. It is safer than other types of fossil fuel in terms of spillage because it is lighter than air. This makes it disperse quickly when released.

It has a higher ignition temperature, which means it does not ignite easily. The storage systems used for compressed natural gas are infinitely stronger than the gasoline tanks on cars and trucks today.

The idea of compressed natural gas was first introduced in 1997, and the conversation has continued ever since.

It will interest you to know that Nigerian Independent Marketing Company (NIPCO) Plc launched the country’s first compressed natural gas (CNG) in Benin City for vehicular and other applications in January 2010.

Governor Godwin Obaseki of Edo State said in June 2023 that about 5,000 vehicles run on CNG in the state.

Also, the Group CEO of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, confirmed during an energy summit in April 2023 that Nigeria has the infrastructure to transport about 6.9 Billion Standard Cubic Feet (BCF) of gas to support power generation and gas-based industries.

According to the NNPCL, during its partnership with NIPCO, the company said that the partnership is part of its commitment to reducing its carbon footprint and providing cheaper alternative fuel to motorists in the country.

The GCEO of NNPC Ltd. said this initiative was in addition to the phased deployment of 56 CNG stations planned by NNPC Retail across the country.

Kyari was quoted during the partnership briefing as saying, “This landmark collaboration aims to expand our CNG infrastructure, improve access to CNG, and accelerate the adoption of cheaper and cleaner alternative fuel for buses, cars, and Keke NAPEP, which will significantly reduce the cost of transportation and engender sustainable national economic growth.

“Under the NNPC-NIPCO strategic partnership, 35 state-of-the-art CNG stations will be constructed nationwide, including three (3) Mother stations.”

“The first phase, comprising 21 CNG stations, will support intra-city transportation and be ready by the first quarter of 2024; While the second phase, comprising 35 CNG stations, will support inter-city transformation and will be ready by the first quarter of 2025.”

“This will be further complemented by an additional 56 stations to be deployed by NNPC Retail across the country,” he added.

To deepen and sustain this initiative, Kyari noted that the NNPCL had floated NNPC Prime LNG Limited for domestic LNG production and supply.

He added that the NNPC is also collaborating with Miju Auto Gas, a leading CNG kit Equipment Manufacturer (OEM) based in India, to set up training and conversion centers to facilitate in-country conversion of vehicles from petrol to CNG.

Kyari said NIPCO Gas Limited is operating 14 CNG stations across Nigeria and has converted over 7,000 vehicles to run on CNG.

“This forward-thinking initiative will leverage Nigeria’s abundant natural gas resources to bring multiple benefits to Nigerians, including access to cheaper fuel, reduced transportation costs, reduced carbon emissions, new business value chains, and streams of job opportunities,” Kyari said.

I will also suggest that the government license capable technicians and allow them to carry out CNG conversion.

They should also license conversion centers or companies. Considering NIPCO’s heavy investment and the need to recoup their investment, the government can allow NIPCO to be an inspector of all converted vehicles. They can charge a fixed amount, let’s say, N20,000 TO N30,000.

Just imagine licensing 20 centers on average per state, and each center employs 20 people.

Each center can convert two cars per day. Currently, NIPCO centers do one per day, with some doing two.

We can create close to 20k direct jobs, and by January we can achieve a daily conversion of 1k vehicles.

NNPCL stations should have the capability to refill any CNG vehicle. The government should give a grant to other filing stations that are willing to build CNG refill facilities.

Opportunities for the government to enforce comprehensive car insurance Considering the safety of CNG conversion

Most importantly, the government should subsidize the conversion by 50% for the first year of the programme. Only those vehicles that have been inspected by NIPCO will get a 50% refund.

The idea of harnessing CNG has been in Nigeria’s policy pipeline for decades. I have also established that its utilization has been put to a certain level of practice. With the petrol subsidy gone, there is no better time to take full advantage of this efficient and climate-friendly energy source.

Adewole Kehinde is an Energy Expert and can be reached at 08166240846, kennyadewole@gmail.com