Iranian companies will export $2.5 billion worth of compressed natural gas technical and engineering services to Nigeria in the near future, a member of the CNG Trade Union of Iran said.
“According to the memorandum of understanding between Iran and Nigeria, it is planned to sign a contract for turning one million cars CNG-run, set up about 70 centers for vehicle conversion services and build 1,000 CNG filling stations in three Nigerian cities,” Mahmoud Qasemi was also quoted as saying by the Oil Ministry’s news agency Shana.
“Next week, a business delegation consisting of technical and engineering groups will be sent for negotiations with the Nigerian Ministry of Petroleum Resources to complete preparations for signing the final contract,” he added.
Qasemi noted that Iran and Nigeria have agreed to implement the project within seven years.
The remarks come days after Iranian and Nigerian oil ministers signed a memorandum of understanding to expand petroleum cooperation between the two leading oil producers in the world.
Iranian Oil Minister Javad Owji said after signing the deal that the provision of CNG services by Iran to Nigeria will be the main component of the agreement.
Owji said Nigeria will in return supply technical and engineering services to Iran’s natural gas liquefaction sector.
Benefits of Conversion Plan
Nigeria launched an ambitious plan to convert its car fleet to gas last year, as the country aims to cut reliance on imported fuel and use its excessive supplies of liquefied natural gas.
The Nigerian government has stated that CNG was selected as the fuel of choice because it holds a comparative advantage due to its ease of deployment, its comparatively lower capital requirements, supply stability and in-country volumes.
CNG is a natural gas under pressure that remains clear, odorless and non-corrosive. Although vehicles can use natural gas as either liquid or gas, most vehicles use the gaseous form, compressed to about 218 kg/cm2.
According to IEA data on CO2 emission in Nigeria, there is a steady rise in CO2 emissions in Nigeria’s transportation sector. A review of the data shows that in 2018, the sector accounted for the largest source of emission with 67 million tons of CO2, of which road transport accounted for 66.5 million tons.
The number of gasoline and diesel vehicles in Nigeria over the years justifies the CO2 emissions from the transportation sector.
According to a report, Nigeria only had 6,000 CNG automobiles in 2018 in comparison with the 11.7 million total registered vehicles.
CNG can be used as an alternative to conventional gasoline and diesel fuels to reduce CO2 emissions and increase energy security.
In Nigeria, the unpredictability of the gasoline market often leads to scarcity. During these times, gasoline is usually sold at a very high price and this y increases the cost of transport, and of every other commodities indirectly. This makes it more difficult for Nigerians to cope. Converting gasoline-powered cars to CNG hybrids can address the issue.
With the launch of the conversion initiative, automobile experts believe Nigerians will be able to save about 40% in fuel costs.
CNG is a cleaner fuel than gasoline; a CNG car will require lower routine maintenance and this will lead to a CNG car having an additional service year of 2–3 years in comparison to conventional fuel automobiles.
Domestic Capabilities
Techno-engineering services are one of the most important sectors of the oil and gas industry. However, due to sanctions, many of the world's largest companies withdrew from the Iranian market in 2018 and this compelled Iran to promote domestic capabilities.
Reliance on the capacities of Iranian engineers and manufacturers helped improve indigenized knowhow and led to the manufacture of various parts and equipment, especially in the gas sector.
At present, the country is seeking to enter the African energy market and export its services in the field.
A nationwide plan to convert 1.4 million gasoline-powered public transportation and commercial vehicles to compressed natural gas hybrids is underway in Iran.
CNG consumption is growing and has exceeded 24 million cubic meters per day. The figure is expected to rise by a further 90% and reach 45 mcm/d at the end of the conversion scheme.
It is projected to comprise 35% of Iran's total fuel consumption by the end of 2022. To achieve this goal, the government has launched the initiative to motivate more drivers to convert their gas-burning vehicles to CNG hybrids.
Iran has over 2,500 CNG stations and ranks fifth in global CNG consumption.
Boosting the CNG share in the fuel basket can have multiple advantages, especially as it reduces gasoline demand and air pollution.
