Strategies for Commercializing Compressed Natural Gas in Nigeria

Abstract In this era of energy transition there is the need to commercialize the use of compressed natural gas (CNG) in Nigeria due to low carbon emission it generates. The widespread use of CNG as automotive fuel will serve as a transition fuel for sustainable energy transformation in Nigeria. Compressed Natural Gas (CNG) was first utilized as an automotive fuel by NNPC Ltd Gas Infrastructure Company (NGIC} a subsidiary of Nigerian National Petroleum Company Ltd under a pilot scheme over thirty (30) years ago. This scheme was part of NGIC's strategic efforts at promoting natural gas utilization and expanding the revenue base of the Company through commercialization of CNG. Despite NGIC's efforts, CNG is yet to be fully commercialized. The qualitative research method was adopted. Data for the study were collected through literature review and multiple case study of emerging countries that have promoted commercialization of CNG. Based on the analysis of the data and records, it was discovered that the target market for CNG is yet to be clearly defined. No economic incentive exists for vehicle conversion and establishment of CNG refueling stations. Cooperation between NNPC Gas Marketing Limited (NGML) and gas distribution companies which is critical in providing cost-effective gas infrastructures for CNG commercialization is nonexistent. In view of the above findings and conclusions, it is recommended that policy makers should: Promote the development of on-site refueling stations and/or locate public stations as close as possible to fleet vehicle owners. Partner with gas distribution companies through attractive revenue sharing (e.g., 50/50 split) as a strategy for promoting CNG market. Target fleet vehicles particularly those owned by existing gas users. Sell gas to CNG refueling station at a price lower than petrol price to encourage private investment in the station.