The Ondo State Government, through its Development and Investment Promotion Agency (ONDIPA), has entered into an agreement with OCTAGRAM Fusion CNG Limited for the development of a compressed natural gas (CNG) mother station with a proposed capacity of nine million standard cubic feet per day in the Omotosho area of the state.

The agreement, signed on October 14, 2026, provides for the location of the proposed facility within the Ore Industrial Park, near existing national natural gas pipeline infrastructure.

According to the project partners, the development is intended to improve access to natural gas for industrial manufacturers, commercial transport operators and other energy-intensive businesses in Ondo State and neighbouring markets.

The proposed facility is expected to support the distribution of compressed natural gas to customers who are not directly connected to conventional gas pipelines.

OCTAGRAM said it obtained a Licence to Establish from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in May 2026.

The approval represents an initial regulatory milestone in the development of the proposed gas infrastructure.

The company is now pursuing a Licence to Construct, alongside engineering work, procurement planning and negotiations with prospective commercial partners.

OCTAGRAM said it would continue working towards the remaining regulatory requirements before moving to the construction phase.

The proposed CNG mother station is designed to compress natural gas for transportation to industrial and commercial customers.

At its planned capacity of nine million standard cubic feet per day, the facility would form part of a distribution network intended to supply customers beyond the reach of existing pipeline infrastructure.

The project is expected to operate through a virtual pipeline model.

Under this arrangement, natural gas is compressed at a central facility and transported in specialised high-pressure containers to designated delivery points.

The system can provide an alternative for businesses that require natural gas but are not located close enough to existing pipelines to justify a direct connection.

Potential customers include manufacturing companies, industrial facilities, commercial transportation fleets, power producers and independent CNG distribution operators.

OCTAGRAM said the proposed facility would combine gas compression infrastructure with specialised transportation equipment and downstream delivery arrangements.

The company is also exploring long-term gas supply and offtake agreements to support the project’s commercial viability.

The choice of Omotosho is linked to its proximity to existing natural gas transmission infrastructure.

According to the project partners, this location could provide access to gas feedstock, subject to the completion of the necessary technical and commercial arrangements.

The facility is intended to serve customers within an economically viable distribution radius of Omotosho.

Potential markets identified by OCTAGRAM include industrial clusters and transport corridors connecting Ondo with Lagos, Ogun, Ekiti and Edo states.

The company said the project could support businesses seeking alternatives to conventional liquid fuels and improve access to gas for customers outside existing pipeline networks.

However, the eventual geographical reach of the facility will depend on transportation costs, customer demand, infrastructure availability and the terms of gas supply agreements.

Chief Executive Officer of ONDIPA, Emmanuel Omomowo, said the agreement formed part of the state government’s efforts to attract private investment and strengthen industrial infrastructure.

“Ondo State remains committed to attracting investments that unlock our natural resources, strengthen industrial infrastructure and create sustainable economic opportunities for our people,” Omomowo said.

He described the agreement as another step towards positioning Ondo State as a destination for energy-intensive industries.

“Our agreement with OCTAGRAM Fusion CNG represents another important step towards positioning Ondo State as a competitive destination for energy-intensive industries and private-sector investment,” he added.

Omomowo said the agency would support the development in accordance with applicable regulatory requirements.

The proposed investment is also expected to complement the industrial development agenda of Governor Lucky Aiyedatiwa’s administration.

According to the project partners, the facility could create economic opportunities in gas transportation, logistics, engineering, operations and related services.

The number of direct and indirect jobs expected from the development has not been disclosed.

Chief Executive Officer of OCTAGRAM Fusion CNG Limited, Olutunde Odeyale, said the project was informed by the gap between Nigeria’s natural gas resources and the availability of reliable gas supply to industrial and commercial consumers.

“Our investment thesis is built around a clear commercial opportunity: Nigeria has substantial natural gas resources, yet many industrial and commercial consumers remain unable to access reliable and competitively priced gas,” Odeyale said.

He explained that the proposed location near gas transmission infrastructure would provide an opportunity to develop a compression and distribution platform serving businesses across the region.

“By locating our proposed mother station close to existing gas transmission infrastructure at Omotosho, we intend to bridge that gap through an efficient CNG production and distribution platform,” he said.

Odeyale identified the completion of regulatory processes, infrastructure planning and commercial negotiations as the company’s immediate priorities.

He said the agreement with ONDIPA and the Licence to Establish were important steps in the development process.

The proposed facility comes amid efforts to increase the use of natural gas in Nigeria’s domestic economy.

CNG is used in transportation and industrial applications and can provide an alternative to petrol and diesel in suitable vehicles and equipment.

For manufacturers and commercial operators, access to gas can offer another energy option, although the financial benefits depend on supply prices, conversion costs, infrastructure and operational requirements.

The development of mother stations and virtual pipeline networks is one approach to extending gas distribution beyond areas served directly by pipelines.

Such infrastructure can be particularly relevant to industrial customers that require substantial energy supplies but are located away from established gas transmission networks.

The partners said they would continue working on the regulatory, engineering, procurement and commercial requirements necessary to advance the project.

OCTAGRAM is expected to pursue its Licence to Construct while developing gas supply arrangements and engaging prospective customers.

Further announcements are anticipated when the project reaches subsequent milestones, including regulatory approval for construction and the commencement of physical development.