The U.S. Trade and Development Agency (USTDA) has announced support for a new liquefied natural gas project in Nigeria aimed at expanding reliable energy access to industries and underserved communities in the country’s northern region.
Towards achieving that goal, the agency disclosed in a statement on Friday that it had signed an agreement with Nigerian energy company Powergas Nigeria Ltd to fund a feasibility study for a proposed small-scale LNG plant in southern Nigeria.
The project is expected to strengthen energy security by supplying LNG to northern Nigeria through a “virtual pipeline” trucking network, providing an alternative to areas without conventional gas pipeline infrastructure.
Bridging Infrastructure Gaps
Northern Nigeria’s growing industrial sector is driving demand for reliable energy solutions. The delivery of LNG via trucking networks to areas without traditional gas pipeline infrastructure offers a practical solution to the region’s energy challenges.
The USTDA-funded feasibility study will assess the technical and financial viability of the proposed LNG facility, develop an implementation plan, and identify U.S. suppliers for critical equipment, including liquefaction systems, electrical controls, and engineering services. The study will also involve an LNG market assessment and off-taker engagement to help identify new customers for Powergas’s anticipated LNG operations.
USTDA Deputy Director Thomas R. Hardy said the initiative would support private sector-led growth while creating opportunities for American companies to deploy advanced LNG technologies in Nigeria
“This project will help address critical energy security needs in a region where underinvestment in infrastructure has impeded economic opportunity,” Hardy said. “At the same time, our support for this project will open new opportunities in Nigeria for America’s LNG industry, strengthening U.S. global competitiveness in the energy sector.”
The agency said the feasibility study would provide the technical groundwork needed to secure project financing while opening procurement opportunities for American companies seeking to participate in Nigeria’s expanding energy market.
Powergas’s LNG Expansion
Powergas, one of Africa’s largest producers and distributors of compressed natural gas (CNG), sees the project as a natural next step in its expansion. The company currently has five operational CNG plants from which it has delivered over 14 billion standard cubic feet of CNG to industrial, commercial, and transport customers across Nigeria.
Abiodun Oseni, Powergas Head of Strategy, said: “At Powergas, we have built a market-leading expertise in Nigeria’s compressed natural gas value chain from compression to virtual pipeline distribution. LNG is our natural next frontier, seeing that it allows us to go further and serve even more remote industries and communities Pan-Nigeria.”
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Oseni added that USTDA’s catalytic support is critical as it de-risks the company’s strategic leap and accelerates project bankability. “We are deliberately keen in evaluating and adopting U.S. innovation, engineering, and liquefaction systems to ensure world-class execution, while delivering cleaner, reliable energy to power Nigeria’s growth.”
Project Scope and Location
The proposed scalable small-scale LNG plant will have a total nameplate capacity of 200 metric tons per day of LNG, consisting of four trains of 50 metric tons per day each. The plant will be located at one of Powergas’s two existing sites, either at the Ebedei CNG plant in Delta State or the Ogbele CNG plant in Rivers State.
Businesses interested in submitting proposals for the feasibility study must be U.S. companies, as USTDA-funded programming is carried out by U.S. firms. The proposal submission deadline is August 7, 2026. The selected U.S. firm will be paid from a $1,227,000 grant to Powergas from the agency.
The U.S. Trade and Development Agency is the U.S. government’s first mover on critical infrastructure development in emerging markets, advancing the shared strategic priorities of the United States and overseas partners while creating opportunities to deploy trusted U.S. solutions.
USTDA-funded programs are executed by U.S. companies. Businesses interested in bidding for the feasibility study can find more information at www.ustda.gov/work/bid-on-an-overseas-project.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X