Can you provide an overview of Asiko Energy?

Asiko Energy was founded 19 years ago, primarily focusing on transportable gases, specifically liquefied hydrocarbon gases. We recognized that Nigeria lacked the necessary infrastructure for efficient gas transportation, prompting the company to adopt a virtual pipeline approach from its inception. Asiko Energy has remained steadfastly dedicated to the gas sector since its inception, with plans to expand beyond liquefied gases like butane and propane to eventually include methane. Despite encountering some delays, the company has managed to establish a significant presence across Nigeria, ensuring coverage in every region and allowing for the provision of services to nearly every state. We are currently constructing a tri-fuel LPG, LNG and propane facility in Lagos, which will substantially address domestic demand for gases.  

What progress has been made on your tri-fuel terminal?

We are currently focused on completing phase two, dedicated to LPG and propane applications. However, phase three, involving LNG, faces delays in progressing to the Final Investment Decision (FID) stage due to economic challenges and administrative hurdles like state-level approvals. Additionally, relocating phase one’s LPG facility to make space for phase three introduces sequencing issues, with permit acquisition for the new location already underway.

What are some unique challenges encountered by companies in Nigeria’s gas market?

There are two main challenges. Firstly, navigating complex regulatory hurdles due to overlapping agency remits. Secondly, currency instability poses a considerable obstacle. We mitigate by borrowing locally and purchasing currency for equipment, but it introduces short-term uncertainties, impacts capital cost estimates, and requires frequent adjustments to procurement strategies.

The removal of fuel subsidies by the government has had a noticeable impact on demand for LPG. Initially, there was hope that the subsidy would boost LPG usage, but that has not materialized. Gasoline prices are often lower or equal to LPG prices due to the subsidy, which does not incentivize a shift towards LPG. Initially, when gasoline prices rose, there was some interest in LPG for Autogas, but it has not continued. 

What are the key opportunities in Nigeria's gas market despite current challenges?

In Nigeria's gas market there are promising prospects across various sectors such as domestic power generation, automotive and industrial/commercial. While the domestic sector has historically dominated, significant opportunities are emerging in Autogas, especially with the potential adoption of tricycles, minibuses, and similar vehicles. Over the next five years, initiatives in Autogas could contribute an additional 1 to 1.5 million t/y to market demand. Additionally, individual conversions for generators are showing remarkable growth due to lower conversion costs, driving market expansion independently. Our priority lies in enhancing rural gas accessibility and penetration rather than solely expanding geographically.

How do you approach stakeholder relations and what is Asiko Energy’s place in the energy transition?

In our downstream operations, community engagement is a priority. For instance, during terminal construction we involve the local community, incorporating their supplies like sand and gravel after verifying their quality. We maintain a responsible presence in every community, contributing positively to their well-being.

I believe the energy transition is a global shift. Looking ahead, the data suggests that natural gas will remain a significant part of the energy mix. Nigeria's abundance of gas resources positions us well to align with or even exceed this trend. While our region has not been a major carbon emitter historically, we prioritize practical solutions that displace more polluting fuels like oil and diesel. Our approach focuses on addressing climate change by displacing harmful fuels rather than solely adopting newer technologies.

What are Asiko Energy's main priorities for 2024–2025?

As for the Ijora terminal, we hope to complete it by the end of the year, although we are facing challenges in sourcing the final equipment components. Looking ahead, our focus is on improving our sourcing capabilities to meet project deadlines in a tough environment. We are committed to advancing gas utilization nationwide and ensuring operational efficiency. Despite challenges, we are determined to achieve our objectives and support the growth and sustainability of the energy sector.

Our main priority is to make gas widely available across local markets. We are expanding operations to cover all gas components and ensuring efficient distribution, similar to petrol stations offering various fuel types. This aligns with our commitment to improving nationwide gas accessibility.