The United States government has thrown its weight behind a new liquefied natural gas (LNG) project aimed at expanding energy access in northern Nigeria, while opening fresh commercial 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 finance a feasibility study for a proposed small-scale LNG plant in southern Nigeria.
The proposed facility will process natural gas into LNG for transportation by road to northern Nigeria, where limited gas pipeline infrastructure has continued to constrain industrial growth and access to reliable energy.
Rather than relying on conventional pipelines, the project will utilise “virtual pipeline” trucking networks to deliver LNG to factories, businesses and underserved communities, strengthening energy security and supporting economic development across the region.
USTDA Deputy Director Thomas Hardy said the initiative underscores the agency’s commitment to promoting private sector-led growth through the deployment of innovative American energy technologies. “USTDA is helping catalyse private sector-led growth through the use of innovative U.S. energy technology. This project will help address critical energy security needs in a region where underinvestment in infrastructure has impeded economic opportunity,” Hardy said.
He added that the project would also create significant business opportunities for U.S. firms by positioning them to supply liquefaction equipment, electrical control systems, engineering expertise and other critical infrastructure required for the facility.
According to USTDA, the feasibility study will assess the technical and commercial viability of the project, develop an implementation roadmap and identify suitable American suppliers for key equipment and services. The study is also expected to enhance the project’s bankability and attract investment for its eventual execution.
Powergas Nigeria described the initiative as a strategic milestone in its expansion from compressed natural gas (CNG) into LNG distribution.
The company’s Head of Strategy, Abiodun Oseni, said Powergas has established itself as a major player in Nigeria’s CNG sector and now sees LNG as the next phase of its growth strategy.
He said the proposed project would enable the company to deliver cleaner, more reliable energy to industries and communities in remote parts of the country, while USTDA’s support would reduce investment risks and strengthen investor confidence.
Oseni added that the company plans to leverage American engineering expertise and advanced liquefaction technology to ensure the project meets international standards.
Despite possessing one of Africa’s largest proven natural gas reserves, Nigeria continues to grapple with inadequate gas transportation infrastructure, leaving millions of households and industries without reliable energy.
Industry experts increasingly view small-scale LNG facilities, supported by virtual pipeline networks, as a cost-effective solution for supplying natural gas to off-grid industrial clusters and communities where conventional pipeline systems are economically unviable.
The initiative is also expected to deepen U.S.-Nigeria commercial cooperation in the energy sector while supporting the use of cleaner-burning natural gas as a transition fuel to drive industrialisation and economic growth.
