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Oando Gas and Power Limited said on Monday that it has commenced the development of a mini Liquefied Natural Gas (LNG) facility in Ajaokuta, Kogi State.

The company said the Ajaokuta mini-LNG project is being undertaken through a subsidiary – Transit Gas Nigeria Limited (TGNL) – and is targeted at meeting the gas supply requirements for captive power plants, embedded generation and industrial clusters in Northern Nigeria as well as stranded customers in the south.

The Ajaokuta mini-LNG will help off-takers – including power plants and industrial customers reliant on fuels such as diesel and low pour fuel oils (LPFO) – to lower energy costs by up to 40 percent, while significantly decreasing carbon emissions.

“The establishment of the Ajaokuta mini LNG project is in firm alignment with our mid- to long-term gas conversion strategy,” said Bolaji Osunsanya, CEO of Oando Gas and Power. “This venture further emphasizes 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.”

The modular nature of the Ajaokuta mini-LNG project requires minimal infrastructure development. This substantially reduces the design complexity as well as time and cost associated with traditional gas pipeline development.

Oando Gas and Power said its TGNL subsidiary will establish the Ajaokuta liquefaction plant where feed gas will be cooled into a liquid state. Then the liquefied gas will be stored at the plant site and subsequently transported to respective customer regasification facilities.

“LNG is a viable provisional solution and an industry game-changer for the development of gas markets ahead of the actualization of a far-reaching nationwide gas pipeline network as stipulated by the Nigerian Gas Master Plan,” Osunsanya said.

Oando Gas and Power is a fully owned subsidiary of the Nigerian oil and gas giant, Oando. The company currently supplies gas and power to over 160 industrial and commercial customers via several subsidiaries including: Gaslink Nigeria Limited, Central Horizon Gas Company, Gas Network Services, and Alausa Power Limited.