The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has awarded 25-year gas distribution licenses to 10 companies for the establishment, construction, and operation of gas distribution networks.
The licenses are part of a strategy to enhance domestic gas use, particularly across Lagos, Ibadan, Port Harcourt, and Benin City.
These measures aim to ensure that natural gas reaches homes and industries in the southwestern and southern regions of Nigeria.
At a ceremony held in Abuja on Tuesday, NMDPRA’s Authority Chief Executive, Ahmed Farouk, announced that the Nigerian National Petroleum Company Limited, Shell, Nipco, Central Horizon Gas Company, Falcon, and Axxela were among the companies granted licenses.
He explained that the awarded areas are already connected to the Escravos-Lagos Pipeline System.
Of the 30 applications submitted, 20 were disqualified, with the final 10 selected to lead the first phase of this gas expansion initiative.
Among the various clusters, the Agrara, Ota, and Badagry Local Gas Distribution Zone will be jointly managed by NNPC and Shell, with a distribution capacity of 102 million standard cubic feet per day (MMSCF/D).
The Greater Lagos Industrial Area Local Gas Distribution Zone will be operated by NNPC and Gaslink, capable of distributing 130 MMSCF/D.
Similarly, other zones such as Ikorodu, Kara Bridge-Ibafo-Sagamu Interchange, and Lekki Free Trade Zone will be managed by various partnerships, all with significant gas distribution capacities.
In the South-South region, the Port Harcourt Cluster 2 zone will be operated by CHGC, and the Port Harcourt Cluster 1 zone by Shell.
Several other regions, including Ada and Benin, will also be covered under this initiative. Together, the awarded licenses will enable the distribution of over 1.5 billion cubic feet of gas per day, via a 1,200 km pipeline network and over 500 customer stations.
Ahmed Farouk, during his keynote address, emphasized the potential of this licensing regime to fuel Nigeria’s domestic gas market by facilitating gas supply to energy industries, industrial parks, economic zones, and more.
He stated, “This license regime holds a significant opportunity to support the development of our domestic gas market through the supply of gas to our energy and testing industries, industrial parks, special economic zones, embedded captive power generation, mobility CNG schemes, and any other downstream gas utilisation programme.”
Farouk further explained that the regime would support long-term growth, enabling the full potential of Nigeria’s natural gas reserves to be realized.
He noted that pipeline gas would provide a continuous, cost-effective, and safe supply, eliminating storage challenges.
He also highlighted the role of public-private partnerships in accelerating gas infrastructure development, with the government playing a key role in regulatory oversight and funding, while private companies bring in necessary expertise and investments.
Hon. Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), also spoke at the event, stressing that the licensing process is part of the government’s “last mile” gas expansion plan.
He noted that these licenses would bring gas closer to Nigerians and provide exclusive rights for operators to establish and manage gas distribution systems.
He stated, “Today’s event is a testament to our commitment to implementing the PIA in full alignment with the Gas Distribution Regulations of 2023.”
Ekpo also discussed the critical role of gas in Africa’s energy transition, pointing out the severe consequences of a lack of access to clean cooking solutions, which result in 600,000 deaths of women and children annually in Africa.
He explained, “By empowering license holders, this initiative opens extensive opportunities across several key sectors.”
Meanwhile, NNPC Limited’s Group CEO, Mele Kyari, represented by Executive Vice President, Gas and Power, Ogunleye Olalekan, shared that NNPC and its partners are investing $500 million in constructing five liquefied natural gas plants in Ajaokuta, Kogi State.
This investment is part of efforts to boost gas distribution. He assured the license holders that adequate gas supply would be provided across their respective zones and encouraged investors to support the government’s initiatives to improve gas distribution and utilization, describing the gas sector as a vast opportunity space.
This initiative is a significant step in Nigeria’s quest to unlock the full potential of its natural gas reserves and foster economic growth through cleaner, more efficient energy.
