The Nigerian government has issued 10 new gas distribution licences to six companies, marking a major step in expanding the country’s gas infrastructure. The licences, covering a combined capacity of 1.5 billion standard cubic feet per day, were awarded by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja on Tuesday.
The beneficiaries of these licences include NNPC Gas Marketing Limited, Shell Nigeria Gas Ltd, AXXELA, NIPCO PLC, Central Horizon Gas Company, and Falcon Corporation Limited. This initiative is aimed at strengthening Nigeria’s gas distribution network, addressing power shortages, and driving industrial growth.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, reaffirmed the government’s commitment to harnessing Nigeria’s vast gas resources for economic transformation. He emphasized that the initiative aligns with Section 148 of the Petroleum Industry Act (PIA) 2021, which mandates the NMDPRA to regulate gas distribution by granting exclusive rights to qualified operators.
NMDPRA Chief Executive Farouk Ahmed revealed that the licences are part of a broader effort to stabilize the national energy supply, support industrial expansion, and improve access to gas for power generation. The awarded licences will contribute to:
– 1,200 kilometers of new gas distribution pipelines
– Over 500 customer stations
– Expansion of the ‘last mile’ gas supply network
Ahmed noted that the NMDPRA received 30 applications, but only 10 met the minimum requirements for the first phase of the licensing regime.
The expansion of the gas distribution network is expected to reduce Nigeria’s dependence on gas trucking, which has led to frequent accidents and inefficiencies. The NMDPRA plans to replace gas cylinders and trucks with pipeline-based distribution over the next 15 years, allowing homes and industries to access gas directly through an integrated system.
To complement the new pipelines, virtual networks transporting Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) via trucks will be deployed to areas without pipeline access. These virtual networks will later be integrated into the main gas distribution infrastructure.
To further enhance efficiency, the Gas Transportation Network Code will undergo a second revision, focusing on:
– Improved pressure stability and metering
– Better supply quality and operational efficiency
– Automated determination of shrinkage factors across segments
Additionally, the NMDPRA will periodically revise gas pricing and tariffs to keep costs fair and competitive in line with the PIA.
According to Ogbugo Ukoha, NMDPRA’s Director of Distribution Systems, Storage, and Retailing Infrastructure, this initiative is a major milestone in Nigeria’s energy transition. In 2024 alone, the NMDPRA issued over 15,000 licenses across different segments of the industry.
He projected that by 2040, Nigeria will completely phase out gas cylinders and trucked gas, with all gas supply being delivered via pipelines. This will reduce accidents, improve safety, and create a more efficient energy system.
With these reforms, Nigeria is set to unlock its gas potential, drive industrial growth, and reduce reliance on traditional fuels, positioning itself as a major player in the global gas market.
