Ardova Plc-led consortium has entered into an agreement to acquire 100 per cent of Powergas Global Investments Nigeria Limited and Powergas Ebedei Limited (PEL), one of Africa's largest compressed natural gas (CNG) producers and virtual pipeline distributors.

The consortium includes Diadem Energy, while the sellers are A.P. Moller Capital, through its Africa Infrastructure Fund I (AIF I), and Impala Energy Holdings.

The transaction, expected to be completed around the end of 2026 subject to regulatory and other required approvals, will give Ardova a major foothold in Nigeria's natural gas compression, distribution and industrial supply market.

Powergas, founded in 2013 by the Clean Energy Group, pioneered the distribution of natural gas beyond Nigeria's conventional pipeline network through compression facilities and road-based virtual pipelines.

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The company supplies CNG to industrial, commercial and power customers, particularly those located beyond the reach of fixed gas pipelines.

For Ardova, the acquisition will add a natural gas platform to its existing businesses spanning petroleum products, liquefied petroleum gas (LPG), aviation fuel, lubricants, shipping and logistics.

Completion of the transaction remains subject to customary closing conditions, including regulatory and other third-party approvals.

The company said it plans to deploy CNG infrastructure across its nationwide retail network, targeting 100 CNG refuelling sites within 24 months.

The initiative is expected to expand access to CNG for motorists and commercial fleets while supporting the Federal Government's efforts to increase domestic gas utilisation and promote alternative transportation fuels.

Dr. AbdulWasiu Sowami, Executive Chairman of Ardova Plc, said the acquisition would enable the company to connect Nigeria's gas resources to the industrial, power and transportation sectors.

"Powergas has built the compression backbone required to take natural gas beyond the conventional pipeline grid.

"Ardova brings a national distribution network, deep customer relationships and the ability to invest for the long term. Together, we intend to connect Nigeria's abundant gas resources to industry, power and transportation," he said.

Sowami said the company would also support the Presidential Initiative on Compressed Natural Gas and Electric Vehicles (Pi-CNG & EV) and the Federal Government's Decade of Gas programme.

"Our ambition is to deliver more affordable, lower-emission energy and lower transportation costs for Nigerians, while building a gas platform with relevance far beyond Nigeria," he said.

The acquisition is also expected to strengthen Ardova's position in the domestic gas value chain by combining Powergas' gas sourcing relationships, compression infrastructure and industrial customer base with Ardova's retail, logistics and distribution network.

Ardova said it intends to expand Powergas' compression capacity across viable gas-producing corridors, creating additional offtake opportunities for associated and non-associated gas.

According to the company, the strategy could support flare reduction while encouraging further investment across the gas value chain.

The enlarged business is also expected to provide gas infrastructure and market access for upstream producers seeking reliable outlets for domestic gas.

Dr. Abiola Babatunde-Ojo, Managing Director of Ardova Plc, said the acquisition would provide the infrastructure and capabilities required to expand the use of gas among Nigerian businesses and transport operators.

"This combination gives us the infrastructure, reach and capabilities to turn the opportunity in gas into something tangible for customers across Nigeria," she said.

"Our focus now is execution: expanding compression capacity, bringing CNG into our retail network and connecting more industries and fleets to a reliable domestic energy source."

Powergas' Ebedei operation also has an environmental component, as its flare gas monetisation project captures gas that would otherwise be flared and converts it into energy for commercial and industrial users.

The company said many of its customers use the gas as an alternative to diesel-powered generators, thereby reducing emissions associated with both gas flaring and diesel consumption.

Powergas has created 175 direct jobs and supports additional employment through its supply chain.

A.P. Moller Capital invested in Powergas Ebedei through Impala, its first investment from AIF I, in April 2019.

The investment supported the development, construction, commissioning and operational scale-up of the business.

Powergas Ebedei commenced operations in 2020, while its Ebedei compression plant was commissioned in 2021. The business has since expanded its distribution footprint across South-East, South-South and South-West Nigeria.

Sam Senbanjo, Partner at A.P. Moller Capital, said the investment had helped Powergas develop from a concept into an operational CNG business.

"Since 2019, PEL has progressed from concept to a fully operational compressed-natural-gas business. Working alongside our partners, management and employees, we supported the business through development, construction, commissioning and scale-up," he said.

He said Ardova and Diadem were positioned to support Powergas' next phase of growth.

Powergas currently operates four mother stations and has a fleet of more than 250 tube skids used for its virtual pipeline distribution model.

Pulak Sen, Vice-Chairman of Powergas, said the company's model was designed to take gas beyond conventional pipeline infrastructure.

"Powergas began in 2013 with the Clean Energy Group's vision of taking gas beyond the pipeline, and A.P. Moller Capital's partnership helped us scale it," he said.

Sen said Ardova's national distribution network would complement Powergas' compression infrastructure and support expansion into new markets.

Diadem Energy is already a virtual-pipeline logistics partner to Powergas Ebedei, transporting CNG by road to industrial customers beyond the existing pipeline grid.

Dr. George Eluwa, Chairman of Diadem Group, said the acquisition would build on the company's existing relationship with Powergas.

"Having worked closely with Powergas as its virtual-pipeline logistics partner, we have seen first-hand the transformative potential of taking natural gas beyond the conventional pipeline network," he said.

The parties said the enlarged platform would, over time, seek to expand beyond Nigeria into the wider West African market.