US backs LNG project to boost energy access in northern Nigeria, open market for American firms
The United States government is backing a new liquefied natural gas (LNG) project aimed at improving energy access across northern Nigeria, with the initiative expected to expand industrial activity, support remote communities and create new opportunities for American energy technology companies.
The U.S. Trade and Development Agency (USTDA) announced on Friday that it has signed an agreement with Powergas Nigeria Ltd to fund a feasibility study for a proposed small-scale LNG plant in southern Nigeria. The facility will process natural gas into LNG for transportation by road to northern parts of the country that lack conventional gas pipeline infrastructure.
The project is designed to strengthen energy security in northern Nigeria, where expanding industrial activities continue to face challenges from inadequate energy infrastructure. Instead of relying on traditional gas pipelines, the LNG will be transported through “virtual pipeline” trucking networks to factories, businesses and underserved communities.
USTDA Deputy Director Thomas Hardy said the initiative demonstrates the agency’s commitment to promoting private sector-led growth through American energy technology while addressing infrastructure gaps in strategic markets.
“USTDA is helping catalyse private sector-led growth through the use of innovative U.S. energy technology,” Hardy said. “This project will help address critical energy security needs in a region where underinvestment in infrastructure has impeded economic opportunity.”
He added that the project would also create commercial opportunities for American LNG technology providers by positioning U.S. companies to supply liquefaction systems, electrical controls, engineering services and other critical infrastructure for the project.
According to USTDA, the feasibility study will evaluate the technical and financial viability of the proposed LNG plant, develop an implementation roadmap and identify suitable U.S. suppliers for key equipment and services. The study is also expected to lay the groundwork for attracting financing needed to move the project into implementation.
Powergas Nigeria described the initiative as a major step in expanding its footprint beyond compressed natural gas into LNG distribution.
The company’s Head of Strategy, Abiodun Oseni, said Powergas had established itself as a leading player in Nigeria’s compressed natural gas value chain and viewed LNG as the next phase of its expansion strategy.
He noted that LNG would enable the company to extend cleaner and more reliable energy supplies to industries and communities in remote parts of the country, adding that USTDA’s support would reduce investment risks and improve the project’s bankability.
Oseni said the company intends to evaluate and adopt American engineering expertise and liquefaction technology to ensure international standards in project delivery.
Nigeria possesses one of Africa’s largest proven natural gas reserves, yet millions of households and industries continue to face unreliable energy supplies due to inadequate gas transportation infrastructure. Small-scale LNG projects, coupled with virtual pipeline networks, are increasingly being promoted as a practical solution for delivering natural gas to off-grid industrial clusters and communities where conventional pipelines are uneconomical.
The initiative also aligns with growing efforts to deepen U.S.-Nigeria commercial cooperation in the energy sector while supporting cleaner-burning natural gas as a transition fuel for industrial development.
