A Nigerian oil and gas company, NESGAS Limited, announced yesterday the signing of a $200 million contractor financing agreement with Cakasa Nigeria Limited. The agreement will fund the construction of a 50,000 metric-tonne liquefied petroleum gas (LPG) storage facility in Onne, Rivers State.
Nigeria, which boasts the fastest-growing LPG sector globally, has a projected LPG market size of $10 billion. However, its current storage capacity of 800,000 metric tonnes falls significantly short of the government’s target of five million metric tonnes.
NESGAS emphasized that the financing agreement will ensure the timely completion of the project, aligning with the government’s efforts to promote domestic gas utilization. Speaking at the signing ceremony in Abuja, Tunde Banjo, Managing Director of NESGAS, highlighted the project’s potential to accelerate the expansion of Nigeria’s LPG infrastructure, improve supply security, and support the country’s transition to cleaner energy sources.
Banjo stated, “This project marks a significant step forward in our mission to strengthen Nigeria’s LPG value chain. By partnering with Cakasa, we are confident in our ability to deliver this ambitious development successfully.”
Currently, most LPG storage facilities in Nigeria range between 4,000 and 20,000 metric tonnes. The new 50,000 metric-tonne facility is expected to significantly boost LPG utilization in a country where reliance on wood for cooking has exacerbated deforestation and posed serious health risks, particularly for women.
With a target of five million metric tonnes of annual LPG consumption, this project is a critical step toward enabling over 60 million households to adopt LPG by 2030.
