Cyanobacterial lipid droplets (LDs) are packed with hydrophobic energy-dense compounds and have great potential for biotechnological expression and the compartmentalization of high value compounds. Nostoc punctiforme normally accumulates LDs containing neutral lipids, and small amounts of heptadecane, during the stationary phase of growth. In this study, we further enhanced heptadecane production in N. punctiforme by introducing extrachromosomal copies of aar/adc genes, and report the discovery of a putative novel lipase encoded by Npun_F5141, which further enhanced alkane production. Extra copies of all three genes in high light conditions resulted in a 16-fold higher accumulation of heptadecane compared to the wild type strain in the exponential phase. LD accumulation during exponential phase also increased massively to accommodate the heptadecane production. A large number of small, less fluorescent LDs were observed at the cell periphery in exponential growth phase, whereas fewer number of highly fluorescent, much larger LDs were localized towards the center of the cell in the stationary phase. These advances demonstrate that cyanobacterial LDs are an ideal model platform to make industrially relevant compounds, such as alkanes, during exponential growth, and provide insight into LD formation in cyanobacteria.