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Oando Increases Gas Footprint via Ajaokuta LNG Project

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Tuesday, May 10th, 2016
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Oando Gas and Power Limited (OGP), the foremost indigenous developer and provider of gas and power solutions, and a fully-owned entity of Oando Plc, has commenced development of a mini Liquefied Natural Gas (LNG) facility through its Transit Gas Nigeria Limited (“TGNL”) subsidiary in Ajaokuta, Kogi State.

The liquefaction plant is primarily directed towards fulfilling the gas supply requirement for captive power plants, embedded generation, and industrial clusters in the Northern region, as well as stranded customers in the South. Off-takers, particularly, power plants and industrial customers who currently utilise liquid fuels such as diesel and LPFO, will be able to lower energy costs by up to 40 per cent, while significantly decreasing carbon emissions.

Commenting on the initiative, OGP CEO, Mr. Bolaji Osunsanya said: “The establishment of the Ajaokuta mini LNG project is in firm alignment with our mid-to-long term gas conversion strategy. This venture further emphasises our push to broaden our asset portfolio and strengthen our market play within the gas sector; and by providing the gas advantage, we will help spur the development of self-sustaining industrial clusters to bolster the country’s socio-economic growth. LNG is a viable provisional solution and an industry game-changer for the development of gas markets ahead of the actualisation of a far-reaching nationwide gas pipeline network as stipulated by the Nigerian Gas Master Plan.”

With an unlimited supply radius across the country, the Ajaokuta mini-LNG project will provide the solution to the perennial power challenges suffered in certain regions by supplying gas to key foundation off-takers including strategic power plants and commercial concerns.

OGP provides gas and power solutions to over 170 industrial and commercial customers nationwide ensuring cost-savings across board, powering economic development, and engendering environmental awareness.

The company inaugurated its expanding Compressed Natural Gas (CNG) programme in 2013, and is currently spearheading several long term projects including a 400-kilometre South-west to North-west gas pipeline and a Central Processing Facility (CPF) which will serve as the primary gas gathering and processing hub in the Niger Delta.

Commenting further on the company’s strategic direction, Osunsanya said: “We are focused on aggressively developing Nigeria’s gas infrastructure and the Midstream sector at large as evidenced by the ongoing expansion efforts of our various assets. We are poised to conclude the 10km Ijora to Marina expansion of our Greater Lagos pipeline to increase our supply capacity and market, while providing a cheaper power solution for industries and commercial enterprises along the axis. In cooperation with the Rivers State Government, we have also begun the 8km build out of the Central Horizon Gas Company pipeline franchise within the Trans-Amadi area which will have a socio-economic multiplier effect via the availability of power generated, job creation, and the growth of businesses.”

Though Nigeria boasts proven natural gas reserves of 187 trillion cubic feet (TCF), the 8th largest in the world and the largest in Africa, the gas industry has failed to realise its true potential due to a number of challenges including the lack of a suitable long-term fiscal and regulatory framework, insufficient infrastructure, sabotage in the Niger Delta, and slow market consolidation. Analysts have continually touted gas as a means of diversifying Nigerian revenues from the usual reliance on oil.

“Gas must occur as a market-driven development, and Nigeria is not an exception. With oil, there is a ready global market existing for the product. However in gas, you start with an end market and then you develop the gas infrastructure, including extraction, processing facilities, pipelines and connecting infrastructure,” said Osunsanya.

Oando’s holistic gas integration strategy includes methods of transmission and distribution through virtual pipeline solutions such as LNG and CNG to fulfill market requirements while the gestation period for the implementation of the Nigerian Gas Master Plan elapses.

The multi-billion Naira Ajaokuta LNG facility will commence operations in Q2 2017.

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