THE Nigerian National Petroleum Company Limited (NNPCL) has revealed strategic investment plans to expand stake in Compressed Natural Gas (CNG) with aim to provide affordable and sustainable alternative fuels to the motoring public.
The NNPCL sees the investment as more sustainable and efficient means of transiting into widely acceptable energy space. The spokesperson of the Company, Olufemi Soneye, said the intention further informed the energy firm’s decision to reduce its stake in Dangote refinery.
Soneye revealed that the NNPCL capped its stake at 7.2 per cent instead of 20 per cent to build CNG stations across the nation.
He stated this while featuring on Berekete Family Radio, during which he cleared the air on allegations that the Company was collaborating with the Nigerian Midstream and Downstream Regulatory Commission (NMDPRA) to sabotage the Dangote refinery.
He denied the allegations that the NNPCL would sabotage a company in which it had a 7.2 per cent stake.
He mentioned that the NNPCL realised that CNG was more affordable as a better energy alternative for Nigerians, especially during the period of energy transition.
He added that Nigerians could fuel their vehicles with N10,000 when using CNG, compared to petrol.
“The reason for reducing our stake in Dangote refinery is because we wanted to invest in CNG. We observed that CNG is very cheap and all over the world, people are investing in clean and cheaper alternative energy.
“That is why the NNPC is building different CNG stations everywhere. We understand that with N10,000, Nigerians can fill their cars and use it for two weeks. We realised that gas is cheaper in Nigeria, why don’t we invest in it?” the NNPC official stated.
On the allegation of sabotage, Soneye posited, “We want all Nigerians to know that the NNPCL does not have any issue with the Dangote Refinery. We are part of the owners of the Dangote refinery and we don’t want it to collapse.
“We invested billions of naira into the Dangote refinery. As of today, we have a 7.2 per cent stake in the refinery. So, why would we want to sabotage such a company?”
He maintained that the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s Chief Executive, Farouk Ahmed, was speaking in his capacity as a regulator in charge of all operators in the midstream and downstream, including the NNPC.
“Mr Farouk Ahmed is the head of Nigeria’s mainstream and downstream petroleum regulatory authorities. They have power over all refineries. Anything that has to do with the distribution of petrol, they are in charge. In fact, they are superior to the NNPC in that sector. We don’t have anything to do with them,” Soneye posited.
In 2021, the NNPCL acquired a 7.25 per cent stake in the refinery for $1.0bn, with an option to purchase the remaining 12.75 per cent stake by June 2024. But the national oil firm has since reneged on its decision.
The President of the Dangote Group, Alhaji Aliko Dangote, disclosed in July that the NNPC had only a 7.2 per cent stake in the refinery and not 20 per cent.
“The agreement was actually 20 per cent which we had with NNPCL, and they did not pay the balance of the money up until last year; then we gave them another extension up until June (2024), and they said that they would remain where they had already paid, which is 7.2 per cent. So NNPC owns only 7.2 per cent, not 20 per cent.” Dangote stated.
To buttress Soneye’s position, the NIPCO Plc has reiterated that the strategic partnership between its wholly owned subsidiary, NIPCO Gas Limited with the Nigerian National Petroleum Company Limited (NNPCL) to address the infrastructural deficit in the effective utilisation of natural gas as auto fuel will be a game changer in the sector .
The partnership which seeks to establish 35 premium Compressed Natural Gas (CNG) stations and three(3) flagship mother stations nationwide , aiming to serve over 200,000 vehicles daily in 2024 .
Managing Director/CEO of NIPCO Gas,Suresh Kumar, made the assertion during the company’s 2023 Annual General Meeting (AGM) in Abuja .
According to him, plans to operationalize these 35 CNG stations by late 2024 as part of the project’s secondary phase, enhancing inter-city transportation is receiving good attention.
He affirmed that the primary goal of the partnership is to expand the existing CNG infrastructure, ensuring greater accessibility and promoting the adoption of this cost-effective and environmentally friendly fuel for buses, cars, and KekeNapeps.
The partnership is expected to facilitate the setup of 21 CNG stations for intra-city transportation, set to be operational in Q1 2024 while the balance of the 35 CNG stations envisaged will be completed by late 2024 as part of the project’s secondary phase.
Speaking about the company’s performance over the last few years, Kumar stated that NIPCO Gas has continued to demonstrate resilience and sustain growth potential despite challenges such as foreign exchange volatility, rising inflation, and fluctuating petroleum prices in the international market.
“The company is focused on quality service delivery across all our business lines to consistently deliver good profits and value for our shareholders,” he said.
In the LPG sector, NIPCO is playing a crucial role in harnessing Nigeria’s abundant gas resources. Kumar highlighted the company’s significant progress since diversifying into the natural gas distribution subsector following the inauguration of its LPG plant in 2009.
“We have expanded our LPG sector reach to several states through massive skid deployment and other infrastructure, enhancing access to the product at market-friendly rates. Our LPG penetration grew to over 70 outlets in 2023, with prospects of reaching 100 in 2024,” Kumar noted.
