Nigeria: Energy consortium targets 100 CNG stations in 24 months

The Ardova Plc–Diadem Energy consortium has disclosed plans to expand Compressed Natural Gas (CNG) infrastructure across Nigeria following its proposed acquisition of Powergas, with the investors targeting 100 CNG refuelling stations within the next 24 months.

The consortium also plans to increase Powergas’ gas compression capacity and extend its virtual pipeline network to more gas-producing corridors as part of efforts to expand domestic gas utilisation across the industrial, power and transportation sectors.

The plans were disclosed at a staff townhall meeting held at the Radisson Blu Hotel, Ikeja, Lagos, following the announcement of the proposed acquisition of Powergas Global Investments Nigeria Limited and Powergas Ebedei Limited.

Under the transaction, Ardova and Diadem Energy are to acquire 100 per cent of the two Powergas entities from Africa Infrastructure Fund I, managed by A.P. Moller Capital, through Impala Energy Holdings.

Completion of the transaction is expected by the end of 2026, subject to regulatory and other required approvals.

Speaking at the townhall, Chairman of Diadem Group, Dr George Eluwa, said the proposed acquisition would build on the relationship between Diadem and Powergas, which began in 2022 when Diadem became a virtual-pipeline logistics partner to Powergas.

Eluwa said Diadem had since deployed CNG trucks within the Powergas network to transport compressed natural gas by road to customers outside the reach of conventional gas pipelines.

According to him, the partnership recorded more than 6,500 trips in 2025, covering over 2.7 million kilometres and delivering more than 51 million standard cubic metres of gas.

He added that the operation helped avoid more than 500 tonnes of carbon dioxide emissions compared with diesel-based transportation.

Eluwa, however, attributed the achievement to the collective efforts of the Powergas and Diadem teams, noting that the logistics performance depended on Powergas’ compression facilities, operational systems and planning.

He said the acquisition would provide an opportunity to build on the virtual pipeline model and expand access to gas beyond areas served by fixed pipelines.

Also speaking, Chairman of Ardova Plc, Dr AbdulWasiu Sowami, said the consortium’s interest in Powergas was driven not only by its physical assets but also by the workforce and operational reputation the company had developed.

Sowami said Powergas had built customer confidence through its ability to deliver gas safely and reliably, adding that the company’s virtual pipeline model had demonstrated the potential to move natural gas to areas where conventional pipeline infrastructure was unavailable.

He said Ardova intended to build on the existing platform by combining Powergas’ compression and gas supply capabilities with Diadem’s logistics operations and Ardova’s nationwide distribution network.

“This is not only about the assets. It is also about the people and the reputation you have built,” Sowami told Powergas employees.

The Ardova chairman said the enlarged business would seek to connect Nigeria’s gas resources to industries, power producers and the transportation sector while supporting the Federal Government’s Presidential Initiative on Compressed Natural Gas and Electric Vehicles and the Decade of Gas programme.

The planned expansion of CNG infrastructure is expected to include the integration of CNG facilities into Ardova’s existing retail network.

Ardova’s Managing Director, Dr Abiola Babatunde-Ojo, said the company’s immediate focus would be on implementing the expansion plans, including increasing compression capacity, incorporating CNG into its retail outlets and connecting more industries and vehicle fleets to domestic gas.

The consortium also intends to expand Powergas’ compression infrastructure along viable gas-producing corridors to create additional markets for associated and non-associated gas.

The move is expected to provide additional offtake opportunities for gas producers and support efforts to reduce gas flaring by creating infrastructure through which gas can be processed, compressed and transported to commercial and industrial users.

Powergas, founded in 2013 by the Clean Energy Group, pioneered the supply of compressed natural gas to industrial and power customers through compression facilities and road-based distribution.

The company currently operates four mother stations and more than 250 tube skids, according to information released by the parties to the transaction.

Its Ebedei operation also includes a flare-gas monetisation project developed with investment from A.P. Moller Capital.

Speaking on the transaction, Vice-Chairman of Powergas, Pulak Sen, said the proposed change in ownership would provide an opportunity to expand the company’s operations into new markets and geographical areas.

He said Ardova’s national distribution footprint, combined with Powergas’ compression infrastructure, could support the expansion of CNG and contribute to the development of Nigeria’s auto-gas market.

A.P. Moller Capital had invested in Powergas Ebedei Limited through Impala Energy Holdings in 2019 and supported the company through development, construction, commissioning and subsequent operational expansion.

The investment firm said the business had grown from its development stage into an operational CNG platform serving customers beyond the reach of the conventional pipeline network.

Meanwhile, Eluwa assured Powergas employees that the proposed acquisition would not immediately alter existing operations, stressing that the transaction was still subject to regulatory approvals and other closing requirements.

He said operations would continue as usual until the completion of the transaction.

The Diadem chairman also emphasised safety as a priority for the next phase of the business, particularly as the consortium plans to expand road-based transportation and CNG infrastructure.

“Gas is our business and safety is our licence to operate,” Eluwa said, stressing the importance of protecting drivers, operators and other personnel involved in the business.

The proposed acquisition comes as Nigeria continues to pursue increased domestic utilisation of its natural gas resources and greater adoption of CNG as an alternative fuel for transportation and industrial applications.

The consortium said its longer-term objective was to expand the platform beyond Nigeria, with West Africa identified as a potential future market.

The transaction was first announced by A.P. Moller Capital and Ardova on September 25, 2026.

Following completion, the enlarged business is expected to combine Powergas’ gas sourcing and compression infrastructure, Diadem’s virtual-pipeline logistics capabilities and Ardova’s retail, logistics and distribution network.

The parties said the combination would position the business to expand access to natural gas for industrial customers, commercial fleets and motorists while supporting further investment across Nigeria’s gas value chain.