In a strategic move to boost domestic gas distribution and enhance Nigeria’s energy transition, the Federal Government has issued 25-year gas distribution licences to companies in 10 franchise areas, covering major cities such as Lagos, Ibadan, Port Harcourt, and Benin. The licences, granted through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), are expected to significantly improve gas supply for industrial and domestic use.
The beneficiaries of these licences include major players in the oil and gas sector such as the Nigerian National Petroleum Corporation (NNPC), Shell, Central Horizon Gas Company, Falcon, Axxela, and NIPCO. According to NMDPRA, over 30 companies submitted applications, but only those in areas already connected to the Escravos-Lagos Pipeline System (ELPS) were awarded the licences.
Strengthening Nigeria’s Gas Market
Speaking at the licence award ceremony in Abuja, Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, emphasized that the move aligns with the federal government’s “last mile” gas expansion programme. The initiative aims to make natural gas more accessible to Nigerians while supporting the full implementation of the Petroleum Industry Act (PIA) and the Gas Distribution Regulations of 2023.
“These licences grant the exclusive right to establish, construct, and operate gas distribution systems,” Ekpo stated. “They will ensure the non-discriminatory distribution and sale of natural gas within designated local distribution zones.”
The minister highlighted the significance of this initiative in Nigeria’s broader energy transition agenda, describing natural gas as a “critical resource” that will drive economic transformation.
Pipeline Network to Boost Distribution
NMDPRA’s Authority Chief Executive, Engr. Farouk Ahmed, shed light on the scale of the expected impact. He disclosed that the newly licensed companies would collectively distribute over 1.5 billion cubic feet of gas daily through a network of 1,200 kilometers of gas pipelines and more than 500 customer stations.
“This licence regime is a game-changer for Nigeria’s domestic gas market,” Ahmed said. “It will support industries, special economic zones, and even mobility compressed natural gas (CNG) schemes.”
He further noted that the programme would encourage investments across different sectors, enhance job creation, and improve the overall socio-economic impact of gas resources in Nigeria.
“These licences provide a foundation for long-term growth, opening up opportunities for revenue generation and employment,” he added. “Pipeline natural gas ensures continuous supply, reduces costs, and eliminates storage challenges.”
Ahmed assured that NMDPRA remains committed to fostering public-private partnerships that would fast-track the development of critical gas infrastructure. He emphasized that while the government would provide regulatory oversight and funding support, the private sector would play a crucial role in bringing technical expertise and investments.
NNPC and Partners Invest $500 Million in LNG Plants
As part of efforts to scale up gas distribution, the Group Chief Executive Officer of NNPC Limited, Mallam Mele Kyari, announced a $500 million investment in five Liquefied Natural Gas (LNG) plants in Ajaokuta, Kogi State. Represented at the event by the company’s Executive Vice President for Gas and Power, Ogunleye Olalekan, Kyari assured the newly licensed companies of adequate gas supply across their franchise areas.
He called on investors and industry stakeholders to support the government’s push for increased gas utilization, emphasizing that the gas sector presents a vast economic opportunity.
“The gas sector is an untapped goldmine,” Kyari remarked. “With the right investments and policies, we can achieve energy security, economic growth, and environmental sustainability.
