The project will be developed by CGA (China Gas Africa Clean Energy Investment Holdings Limited), a joint venture linked to China Gas Holdings and Hearty Nova Limited.

EnerSyn is currently acquiring Hearty Nova, which owns 51% of CGA. That acquisition has not yet been completed and remains subject to administrative closing conditions. EnerSyn Global company announcement⁠

What is being built?

The planned facility is a CNG (Compressed Natural Gas) mother station with capacity to process about 5 million standard cubic feet of gas a day.

Rather than serving only motorists directly, a mother station compresses large quantities of natural gas that can then be supplied to industries, heavy-duty trucks or transported to smaller CNG stations elsewhere.

EnerSyn says the Lagos facility is expected to sell about 46.2 million cubic metres of gas a year under normal operations and should take roughly eight months to build. EnerSyn Global — Lagos CNG project details⁠

The project is planned under a 15-year cooperation arrangement.

CGA will hold a 70% interest, while an unnamed Nigerian partner will own the remaining 30%.

How will the $4m project be financed?

Hearty Nova is expected to contribute $510,000, while China Gas will provide another $490,000.

The remaining $3 million is expected to come from bank loans.

EnerSyn also says the natural gas needed by the station will be supplied by a subsidiary of NNPC Ltd (Nigerian National Petroleum Company Limited). EnerSyn Global — project financing and gas supply⁠

The company estimates that the project could recover its investment in about three years and produce an internal rate of return above 35%, although those figures are projections rather than guaranteed results.

Why Lagos?

The company is targeting Lagos because of its large concentration of industries, logistics companies and heavy-duty transport.

The station is expected to supply gas to industrial users, long-distance trucks and smaller CNG distribution stations.

It would be CGA’s second energy project in Nigeria, after an existing flare-gas recovery project, and is being positioned as a base for further expansion into West Africa. EnerSyn Global company announcement⁠

What this means

The project adds another private investment to Nigeria’s growing CNG market as businesses and transport operators look for alternatives to petrol and diesel.

But it remains a planned project. Construction, financing and regulatory requirements still need to be completed.

The main things to watch are when construction begins, where in Lagos the station will be located and whether the planned eight-month timetable is achieved.