‘We are deploying sustainable approach to CNG adoption in Nigeria’

With the increasing focus on gas as an alternative clean fuel, Compressed Natural Gas (CNG) according to experts is the way forward for Nigeria in the near future as an alternative to petrol and diesel, the Chief Executive Officer (CEO) of Etefa, Johann Rieger in an interview with TAYO OREDOLA, speaks about the prospects and challenges of the 1.5 billion Euros CNG pilot project. Excerpts:

It has been 11 months into the pilot of the Clean and Environmentally Sustainable Transportation (CEST). I would like to know about the journey thus far, challenges and prospects?
Clean Environmental Sustainable Transport (CEST) is a sustainable platform for the Nigerian market in the area of flare gas space, and we are trying to develop the value chain together with our partners like PowerGas for commercial consumption for mainly buses and trucks.

We have changed from the original plan of refurbishing one bus and a truck to just truck refurbishment because we have realised that from the recurrent value of vehicles in the country, it would be advisable to introduce a completely new bus.

So, we are building an entire bus because the current specification for buses is a bit difficult to prove the real potential of gas.

We can significantly reduce expenses on buses with good specific gas-built buses and our prototype would be one which has a life cycle of a minimum of 15 years.

Some of the challenges apart from current specification of vehicles which is for one to two years, are that we don’t have maintenance culture here.

Vehicles are not maintained properly and the third challenge is the level of education of drivers which do not only affect safety but the lifetime of vehicles as well as operation cost.

Also, another challenge is logistics efficiency and bad road condition in the country, as well as low mileage of trucks and the very high cost of capex. All these make it crucial and capital expenditure very sensitive.

Everything goes a little bit higher for this reason and one must find good equilibrium between service and sustainability and on the other hand, meeting the expectation of investors on their returns.

One important step the government made was to reduce subsidy on diesel because the quality of diesel fuels is catastrophic here, though the country has very good oil which is exported for refined fuels.

The main awareness for operators is cost saving. This is the reason why we extended our strategy to use a new bus to really show the real savings potential.

In recent time, gas is becoming the focus in the sector, what economic worth do you think the country can add by looking into CNG?
The use of CNG would help save $2.5 billion yearly as we calculated.

Today, if you flare seven billion cubic metric of gas for nothing and then pour the same amount of diesel with a 100 per cent forex, gas is a local commodity and doesn’t need to be refined.

So it is not only economic but safe for the environment which no one is calculating here yet.

What is the value of about 200 deaths per month in the Niger Delta from flared gas related ailments? So there are a lot of untapped and undefined economic values which we cannot define in monetary terms.

Can you peg a figure to the level of investment on the project?
For this pilot we are investing one and half million Euros which include the gas infrastructure, the building of the first CNG bus and refurbishment of trucks and selected city buses.

We brought half a million Euro from Austria development agency to the project and another half a million Euro invested by our self to develop this market to some extent, trusting that we would be able to convince local partners to switch step by step. It would be difficult for a diesel truck operator to switch to gas just because he heard so.

We need to have a clear proof of the concept and this would take for sure two to three years. But there is no better way for Nigeria in the next 15 to 20 years than this.

You did set a deadline of 18 months for the pilot project. How feasible is this timeline and any possible plan for extensions?
We have extended the project and it is because from the initial plan of refurbishment, we intended to introduce new vehicles and produce locally, as well as introduce drivers’ safety training, which would have a huge impact on safety and reduction of fatalities.

We are cooperating with Federal Road Safety Corps (FRSC) as well as partnering with local players on this. We thought we could refurbish buses but we are taking our time and this would extend the timeline by six months from the initial 18 months.

We want to have enough time to test the vehicles before the project itself which is long term. So, we are planning in the second half of 2019 to convert a truck and bring in a new bus.

The project outlined among other objectives to convert and refurbish city buses and trucks, can you give numbers to rate of conversion to CNG thus far?
We have not converted any yet but we hope to do so by mid-2019.

However as we have defined in the pilot so far, refurbishment in Nigeria would make little sense because of the challenge in mileage unless we want to subsidise which is not an alternative.

If we have a vehicle going 70000 to 120000 kilometers a year, then returns would be alright.

There are two key selection factors for conversion— the life span of the vehicle and the annual mileage because the return would come by saving operating cost through cheaper fuel over a number of kilometres.

If the distance covered is small, there would be high capital cost. We are doing only one truck and also convert some newer city buses which have some life cycle left.

Can you provide the cost of conversion for trucks, buses, cars and how would you describe the level of acceptance?
I can’t do that because it would depend very much on the size of the truck, the engines, and the mileage, which is depending on how many high pressure cylinders, as well as the current starter of the vehicle as well.

What has to be refurbished is not only just the engine, there is also some companies who promote dual fuels, with the argument of 60 to 70 per cent gas and 30 to 40 per cent diesel to reduce the cost of fuel.

CNG is an investment in a technology which has been proven efficient worldwide except if you use such highly sophisticated technology.

Gas we know can pose danger if not handled properly. How do you intend to educate converters and handlers to avoid fatalities?
First of all, the vehicles would be built very safely. Gas is explosive in nature but diesel as well as petrol is explosive too.

Until today, there have been many fatalities on diesel and petrol fuels, but it requires awareness at the vehicle, maintenance and drivers side and we offer training for all of them.

If we train on maintenance properly it is no more dangerous than any other fuel.

What are the future plans for CNG in Nigeria?
After the pilot, we want to manufacture and assemble in Nigeria and then look forward to building drivers’ training centers here.

In the next two years, we are planning to build about 24 of such training centers with our local partners and we want to certify drivers at different levels which would serve as a bench mark for employers.

We are also looking at trucks and on the stationary, we looking at gas operated generators to replace more and more of the diesel generators.