Techno-Economic Prospects and Challenges of Deploying CNG as Transition Fuel in Nigeria's Oil and Gas Downstream Sector

Abstract Nigeria holds approximately 209.5 trillion cubic feet of proven natural gas reserves yet its downstream transportation sector remains structurally dependent on petroleum-derived fuels, with chronic infrastructure deficits and institutional underdevelopment constraining domestic gas monetisation. The Presidential Compressed Natural Gas Initiative (Pi-CNG), launched in 2023, targets the conversion of one million vehicles to Compressed Natural Gas (CNG) by 2027. This study conducted a comprehensive techno-economic assessment of CNG deployment viability in Nigeria's downstream transportation sector, benchmarking existing compression infrastructure against Pi-CNG targets, evaluating feedstock sourcing options, quantifying fleet operator economics, and developing a hybrid delivery model for pipeline-constrained regions. A mixed analytical framework was applied, integrating operational data analysis of twelve active CNG Mother Stations, scenario-based NPV and IRR modelling across three vehicle categories and three feedstock pathways, and a structured comparative analysis of CNG deployment programmes in India and Egypt. Existing Mother Station throughput covers approximately 4.0 percent of the Pi-CNG daily demand requirement. Non-associated gas delivered the highest investment metrics among feedstock options (Net Present Value (NPV): USD 7.9 million; Internal Rate of Return (IRR): 17.4%). Fleet operators achieved fuel cost reductions of 60–63 percent relative to petrol and diesel baselines, with vehicle conversion payback periods of 1.3 to 8.5 months. Virtual pipeline logistics were found to be economically non-viable beyond approximately 680 km, while Liquefied Compressed Natural Gas (LCNG) delivery maintained positive retail margins up to 800 km. The study provides the first peer-reviewed techno-economic assessment of Nigeria's CNG downstream deployment capacity, introducing an integrated analytical framework applicable to analogous sub-Saharan African contexts. A hybrid deployment model combining targeted upstream feedstock investment, accelerated Mother Station expansion, and LCNG station deployment in Northern Nigeria is identified as a technically viable and economically grounded pathway to Pi-CNG programme scale-up.