The Federal Government, in a bid to harness the potential of gas sector for national development, has issued a total of 10 gas distribution licenses to operators in Nigerian Petroleum sector.
This is according to section 148 of the Petroleum Industry Act (PIA) 2021, which mandates the Nigerian Midstream, Downstream Petroleum Regulatory Authority to issue Gas Distribution Licenses to qualified individuals and organizations. It provides an exclusive right to establish, construct, and operate gas distribution systems and ensures the non-discriminatory distribution and sale of natural gas within designated local distribution zones.
Speaking during the award ceremony in Abuja on Tuesday, Ekperikpe Ekpo, Minister of State for Petroleum (Gas) noted that the initiative was aimed at facilitating affordable and reliable energy supply to drive industrial growth, competitiveness and support for the generation of cleaner and more efficient energy to enhance power availability across the nation.
According to Ekpo, the initiative is also expected to accelerate the adoption of CNG as a sustainable fuel alternative in transportation in Nigeria.
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“The issuance of the Gas Distribution License comes at a pivotal moment as we intensify efforts to harness the potential of gas as a critical resource for Nigeria’s energy transition and economic transformation. By empowering license holders, this initiative opens extensive opportunities across several key sectors.
“A thriving domestic gas market is crucial to achieving our ambitions under the Decade of Gas Initiative, he Gas Distribution License framework is a strategic enabler for this vision by expanding the reach of gas infrastructure to underserved areas and deepening gas consumption across residential, commercial, and industrial sectors.
“The Gas Distribution License to qualified stakeholders today, we reaffirm our commitment to the sustainable development of Nigeria’s vast gas resources and to open up further investments in the gas space. This step is not just about meeting regulatory requirements; it is about building a future where gas serves as a foundation for economic growth, industrialization, and improved quality of life for all Nigerians,” he said.
Farouk Ahmed, Authority Chief Executive of NMDPRA, noted that the 10 licences issued are part of Phase-1 of the Gas Distribution Licensing (GDL) regime to operators, who had invested significantly in developing gas distribution infrastructures in the designated Gas Distribution Zones and had met the prescribed minimum requirements.
According to him, a cumulative gas distribution capacity of approximately 1.5 bscf/d with over 1,200km of gas distribution ppipeline network as well as over 500 customer stations will be covered by the licences.
The Gas Distribution License regime for him, holds a significant opportunity of supporting the development of the domestic gas market through the supply of gas to energy-intensive industries, industrial parks, special economic zones, embedded/captive power generation, mobility CNG schemes as well as other downstream gas utilization program.
“We envisage that this licence regime shall not only support the accelerated development of our domestic gas market but that it shall create opportunities for profitable investments for various classes of stakeholders, improve the socio-economic impact of gas resources across Nigeria and support our national energy transition plans.
“The GDLs are expected to lay a solid foundation for long-term growth and prosperity, unlock the full potential of our natural gas reserves, enabling the development of new, untapped markets and creating new sources of revenue and employment. These licenses are expected to catalyse investments.
“The GDLs will play an instrumental role in ensuring that Nigeria’s energy future is not just sustainable, but also equitable and accessible to all Nigerians,” he said.
He said that the Authority shall work with all GDL holders to ensure that the strategic objectives of these licences which include; the efficient and non-discriminatory supply of gas to all wholesale customers in designated local distribution zones, growing the consumption of natural gas under licensed area among others are fully actualized.
He disclosed plans to ensure completion of gas distribution zones by virtual networks that convey LNG and CNG via trucks to the areas that are yet to be accessed by gas pipelines. The virtual pipelines, he said will be integrated with the distribution networks in the future.
“The NMDPRA shall also periodically revise the gas pricing and tariffing frameworks to ensure that the cost of gas remains fair and competitive, in line with the provisions of the PIA,” he added.
The awardees include: Agrara, Ota, and Badagry Zone (102 MMSCF/D) – NNPC and Shell, Greater Lagos Industrial Area Zone (130 MMSCF/D) – NNPC and Gaslink, Ikorodu Zone (25 MMSCF/D) – NNPC and Falcon, Kara Bridge-Ibafo-Sagamu Zone (150 MMSCF/D) – NNPC and Nipco.
Others include: Lekki Free Trade Zone (25 MMSCF/D) – NNPC and Nipco, Ogere-Ibadan Zone (150 MMSCF/D) – NNPC and Nipco, Port Harcourt Cluster 1 (30 MMSCF/D) – Shell, Port Harcourt Cluster 2 (50 MMSCF/D) – CHGC, Ada Zone (30 MMSCF/D) – NNPC, Benin Zone (20 MMSCF/D) – Nipco.
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