PI-CNG Limited, Cape Mano Energy & Petroleum Limited and TSL Engineering Limited have entered into a partnership aimed at accelerating the development of critical Compressed Natural Gas (CNG) infrastructure across Nigeria.

The three companies signed a Memorandum of Understanding (MoU) in Abuja on Wednesday, outlining plans to establish a consortium that will invest in strategic midstream and downstream gas projects.

Under the proposed partnership, the companies will pursue the development of CNG mother and daughter stations, mini-liquefied natural gas (LNG) plants, storage facilities and transportation fleets.

The collaboration comes as the Federal Government intensifies efforts to expand domestic natural gas use and promote CNG as an alternative to conventional petroleum fuels.

The agreement provides for the incorporation of a special purpose vehicle that will operate as the consortium company. The entity will be responsible for identifying, developing and implementing strategic gas infrastructure projects across Nigeria.

The consortium is expected to create an integrated infrastructure platform supporting the production, storage, transportation and distribution of compressed and liquefied natural gas to underserved markets and consumers.

The initiative is also aligned with the Federal Government’s efforts to increase domestic gas utilisation and expand CNG infrastructure as part of measures to provide cheaper and cleaner alternatives to petrol while reducing the impact of high transportation costs on households and businesses.

Ismaeel Ahmed, Chairman of PI-CNG, described the agreement as a significant step towards accelerating the deployment of CNG infrastructure nationwide.

Ahmed said the partnership would move CNG development beyond individual projects by combining the technical, financial and operational capabilities required to deliver infrastructure at scale.

He also expressed optimism that the collaboration would lead to the rapid deployment of CNG facilities across different parts of Nigeria.

Telia Urey, Chief Executive Officer of Cape Mano Energy & Petroleum, said the partnership would build on PI-CNG’s existing efforts to create an enabling environment for the expansion of CNG infrastructure.

“PI-CNG has been doing exceptional work in creating an environment for the development of CNG infrastructure nationally. Through this partnership, we intend to expand on this work and support the development of this infrastructure, to include mother stations, daughter stations, mobile storage, and more,” Urey said.

According to Urey, Cape Mano and TSL Engineering will contribute technical and financial capacity to the partnership, to turn the framework agreement into commercially viable gas infrastructure projects.

The proposed consortium will develop infrastructure linking gas supply with end-users, particularly through CNG mother stations that can function as primary distribution hubs and daughter stations designed to supply gas to locations without direct access to pipeline infrastructure.

It will also consider developing mini-LNG facilities and LNG/CNG transportation fleets, which could provide greater flexibility for moving gas to markets that are not connected to existing pipeline networks.

The proposed structure will enable the partners to jointly identify projects and assess them based on technical feasibility, financial viability and their potential impact on gas utilisation.

Under the MoU, every project approved by the consortium will subsequently be subject to a definitive project agreement detailing the relevant commercial, technical and implementation arrangements.

The parties have also established a governance framework for the proposed consortium.

Its board will consist of five members: two representatives from PI-CNG, one representative each from Cape Mano and TSL Engineering, and an independent industry expert to be jointly agreed upon by the three companies.

A joint Management Team will oversee the day-to-day execution of the consortium’s activities.

Its responsibilities will include legal and government relations, operations, finance, investment and commercial strategy, as well as stakeholder relations.

The agreement states that funding for the projects could come from private equity investors, development finance institutions, government-backed financing mechanisms and international financing sources.

Nigeria has intensified efforts in recent years to develop its domestic gas market, particularly through CNG infrastructure, following the removal of the petrol subsidy and the resulting rise in transportation and energy costs.

The Federal Government has promoted CNG as a cheaper fuel option for vehicles and businesses while seeking increased investment in the infrastructure needed to make natural gas more accessible across the country.

However, the expansion of CNG use has faced infrastructure constraints, including limited compression facilities, transportation systems, storage capacity and retail distribution points.

The proposed consortium is intended to address some of these gaps by developing an interconnected network of facilities across the gas value chain.

PI-CNG is a government-backed programme established to promote the availability of more affordable and environmentally friendly fuel alternatives for Nigerians.

Source: Businessday