When NESGAS Limited broke ground on a 50,000‑metric‑tonne LPG storage depot in Onne, Rivers State on Tuesday, the ceremony was fronted by Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas). The event marked the rollout of a $200 million contractor‑financing pact between NESGAS and Cakasa Nigeria Limited, a deal the government hailed as a leap toward cleaner, domestically sourced energy. The depot, sited within the Oil and Gas Free Trade Zone’s NPA Complex, is expected to shrink Nigeria’s chronic LPG storage shortfall and power millions of households toward greener cooking.
Project Overview and Financing
The freshly‑dug site will house tanks capable of holding 50,000 MT of liquefied petroleum gas – a ten‑fold jump from the typical 4,000‑20,000 MT facilities that dot the country today. The financing agreement, signed on Thursday, provides full‑tilt contractor funding, meaning Cakasa will handle engineering, procurement, and construction while NESGAS retains ownership and operational control. By front‑loading capital, the partners aim to cut the build‑out timeline to under 24 months.
“Partnering with Cakasa ensures we have the expertise and financial backing to execute this ambitious development successfully,” said Tunde Banjo, Managing Director of NESGAS. He added that the depot will act as a hub for downstream distribution, slashing wait times for trucked LPG across the south‑south region.
For the contractor, Barnabas Olise, Managing Director and CEO of Cakasa Nigeria, noted, “We are proud to partner with NESGAS on this transformational project. Our world‑class engineering will lift Nigeria’s storage capacity to meet the next decade’s demand.”
Key Players and Their Roles
The three‑cornered alliance brings together distinct strengths. NESGAS contributes market insight and the regulatory licence to operate within the free‑trade zone. Cakasa supplies the heavy‑lift construction talent that erected Nigeria’s first LNG train back in 2018. The federal endorsement comes from Ekperikpe Ekpo, who voiced the ministry’s confidence that private‑sector investment is the keystone of the nation’s clean‑energy roadmap.
“The private sector’s dedication to invest in infrastructure that will facilitate storage, delivery, and consumption of green energy aligns perfectly with the Federal Government’s initiative for sustainable energy sources,” Minister Ekpo told the assembled crowd. His remarks underscored a policy shift that now favours gas‑based cooking over wood fuel, a move seen as vital for curbing deforestation and the health scourge affecting women who spend hours gathering firewood.
On the Cakasa side, Celestine Cliffe, Executive Director of Business Development, explained that the Onne depot will boost the nation’s LPG distribution corridor, ensuring a more resilient supply chain for both households and heavy‑industry consumers.
Nigeria’s LPG Landscape and the Capacity Gap
According to the Department of Petroleum Resources, Nigeria’s total LPG storage sits at roughly 800,000 MT – a fraction of the five‑million‑metric‑tonne distribution target set for 2030. The country’s LPG market is projected to balloon to $10 billion by 2028, driven by rising middle‑class demand and a government push to replace kerosene and firewood.
Current facilities typically range between 4,000 and 20,000 MT, leaving the system vulnerable to supply shocks during peak winter months. The Onne project, at 50,000 MT, will alone add more than six percent of the nation’s existing storage, a figure that could rise to double‑digit percentages once other planned depots come online.
Industry analyst Dr. Chinedu Okafor of the Energy Policy Institute notes, “Every 10,000 MT of storage translates into roughly 1‑million‑household‑years of cooking fuel. This depot is a real game‑changer for the sector.”
Economic and Environmental Impact
The construction phase is slated to create about 1,200 direct jobs, ranging from welders to site logisticians. Post‑completion, operational staffing will sustain roughly 200 permanent positions, while ancillary businesses – transport firms, local vendors, and service providers – stand to benefit.
On the environmental front, replacing firewood with LPG cuts indoor air pollution by up to 80 percent, according to the World Health Organization. Moreover, domestic LPG consumption helps Nigeria meet its pledged carbon‑intensity reduction targets under the Paris Agreement, as gas burns cleaner than coal or biomass.
Financially, the depot is expected to shave import dependence. In 2023, Nigeria imported an estimated 350,000 MT of LPG, costing the foreign exchange basket over $300 million. A home‑grown storage hub keeps more of that cash circulating locally.
Future Outlook and Next Steps
The ground‑breaking ceremony was just the opening act. NESGAS plans to commence tank erection within two weeks, with concrete pouring slated for early November. Commissioning is projected for the fourth quarter of 2025.
Beyond Onne, the company has earmarked two more sites – one in Port Harcourt and another in Kano – each targeting an additional 30,000 MT of capacity. If all go ahead, Nigeria could surpass the five‑million‑tonne mark by 2032, edging closer to the government’s 2030 household‑penetration goal of 60 million homes.
Stakeholders will watch closely for the first‑of‑its‑kind financing model to be replicated across West Africa, where similar storage deficits hamper LPG adoption.
Background: Nigeria’s Push for Cleaner Energy
Since the 2019 National Gas Policy, the federal government has rolled out subsidies, tax breaks, and regulatory streamlining to entice private investors into the gas value chain. The policy’s twin pillars – domestic gas utilization and LPG expansion – aim to curtail the country’s reliance on diesel generators, whose emissions account for roughly 30 percent of national air pollutants.
Recent data from the Nigeria Bureau of Statistics shows a 12 percent year‑on‑year rise in LPG sales, highlighting a consumer shift that policymakers are keen to sustain. Projects like the Onne depot are the tangible outcomes of that strategy, demonstrating how public‑private partnerships can bridge the infrastructure gap.
Frequently Asked Questions
How will the new depot affect LPG prices for households?
With a larger domestic storage pool, supply bottlenecks are expected to ease, which should curb price spikes during peak demand. Analysts forecast a 5‑10 percent reduction in average retail LPG prices once the depot reaches full operation.
What jobs will the construction of the depot create?
The build‑out will generate roughly 1,200 short‑term positions, including skilled welders, civil engineers, and safety supervisors. After commissioning, an estimated 200 permanent staff will manage operations, maintenance, and logistics.
Why is LPG considered a greener alternative to wood fuel?
LPG burns with lower carbon monoxide and particulate emissions, cutting indoor air pollution by up to 80 percent. Switching from firewood to LPG also reduces deforestation rates, a critical factor for Nigeria’s environmental goals.
What does the $200 million financing agreement cover?
The package funds engineering design, procurement of tanks and ancillary equipment, construction labor, and commissioning services. It is a contractor‑financing model where Cakasa receives upfront capital and is repaid over the depot’s operational life.
How does the depot fit into Nigeria’s five‑million‑tonne LPG target?
Adding 50,000 MT pushes national storage capacity beyond the 850,000 MT mark, covering roughly 6 percent of the five‑million‑tonne distribution goal. Combined with other projects in the pipeline, the country could meet the target by the early 2030s.
ONE AGRI
September 30, 2025 AT 21:02 PMWow, the whole saga of the new LPG depot feels like a drama that finally got a decent script. The government officials parade around, shaking hands, as if that alone will magically fill every kitchen in the country. Meanwhile, the people who actually struggle to light a fire still have to queue for weeks. The $200 million financing sounds massive, but for a nation the size of Nigeria, it’s just a drop in the bucket. Ten‑fold larger tanks might look impressive on the brochure, yet the real battle is getting the gas to the remote villages. I can’t help but feel a pang of sorrow when I think about the women still chopping wood for their meals. Even with this depot, the distribution network is riddled with potholes and corrupt officials. The Minister’s speech was full of lofty promises, but history tells us promises often evaporate. On the flip side, the creation of 1,200 short‑term jobs is a glimmer of hope for the local economy. Still, those jobs will disappear once the tanks are erected, leaving many wondering where the next paycheck comes from. The environmental benefits are real, but the community will only feel them if the gas reaches their stoves. I keep hearing about the “clean‑energy roadmap”, but the roadmap seems more like a vague doodle. It’s also worth noting that the contractor‑financing model shifts risk onto the private sector, which could backfire if market prices tumble. Some skeptics argue that this whole project is a political stunt to win votes before the elections. Others see it as a genuine step toward energy independence. Whatever the motive, the success of the depot hinges on meticulous planning and honest execution. I hope the officials remember that behind every statistic is a human life that could be improved or ignored. In the end, only time will tell if this ambitious venture truly lifts Nigeria’s energy profile or remains a shiny monument to bureaucracy.