Some factories in Nigeria are switching to compressed natural gas to reduce the cost of energy by adopting clean fuel amid a global effort to curb greenhouse gas emission and slow global warming. This opens an opportunity for investment in supply channels.
The Nigeria Gas Company Limited (NGC) estimated that Nigeria could save an average of N10 trillion yearly if three cities (Lagos, Port-Harcourt, and Abuja) alone converted to use of compressed natural gas (CNG). Additionally, the deregulation of the automotive gas oil (AGO) diesel four years ago also shot up energy costs and big industrial consumers of power are looking for cleaner and cheaper alternatives.
CNG is natural gas mainly comprising methane that is stored under high pressure (while remaining in its gaseous form), mainly to transport it, or as storage for later use as vehicle fuel.
CNG is used widely as an alternative fuel for vehicles as it has a high-octane rating. CNG is not to be confused with liquefied natural gas, which has been turned into a liquid and must be at very low temperatures. Although it’s still in its gaseous form, compressed natural gas is under more pressure and takes up a smaller volume than ordinary natural gas (but more volume than liquefied natural gas).
“Our factory runs strictly on CNG. This is because we know it is a cleaner fuel and healthier for the environment than diesel,” AyodapoKeshinro, general manager, sales and technical at Pacegate Limited.
Pacegate manufactures 210 litres steel drums in the tighthead, open head and internally lacquered drums. The plant is Africa’s largest fully automated steel drum facility located in Ilupeju, Lagos. The factory can produce 5,000 steel drums daily in line with the United Nations and International Society Organisation (ISO) standards.
Nestlé Nigeria Plc. pioneered the use of CNG as a fuel source for its Flowergate Factory, in 2013, enabling the big nutrition, health and wellness company in the West African economic powerhouse to reduce electricity cost by 30 percent.
Flowergate Factory receives its regular CNG using specially designed vehicles, to serve as a back-up against unforeseen disruptions in the national supply.
The successful demonstration of the use of CNG as a catalyst for manufacturing performance has attracted the attention of other industry players.
Insecurity, unstable demand, high initial development cost, bureaucratic bottlenecks and challenging terrains have limited the construction of new gas transmission pipelines and stalled projects. But CNG lends itself readily to transport by virtual pipelines, making it cost-effective.
A virtual pipeline is a system that allows for natural gas transport in the form of compressed or liquefied gas using modules coupled to mobile platforms, which are transported by trucks, ferry boats, boats and/or rail platforms.
“We are betting big on gas-fired independent power plants. We will deploy virtual pipelines to transport our gas, particularly the compressed natural gas, which is gaining currency among industrial customers,” ChudiObianwu, vice-president of A. P. Moller told BusinessDay. The investment house owns Impala Energy, which is aggressively seeking to address the energy needs of industrial customers.
The advantages of CNG go beyond its use for powering industrial complexes. In Lagos, the major intra-city transporters (Lagbus and BRT), are estimated to spend an average of N14.8 billion daily on automotive gas oil (AGO) and can save up to N11 billion by expending just N3.8 billion on CNG.
Natural gas powers more than 175,000 vehicles in the United States and roughly 23 million vehicles worldwide. The advantages of natural gas as a transport fuel include its domestic availability and reduced greenhouse gas emissions over conventional petrol and diesel fuels.
