In a move to enhance the utilisation of natural gas in Nigeria, the Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has awarded 25-year gas distribution licenses to 10 companies. These licenses are aimed at the establishment, construction, and operation of gas distribution networks across various regions in the country.
The licenses cover key franchise areas, including Lagos, Ibadan, Port Harcourt, and Benin City, with the objective of ensuring that natural gas reaches the last mile in homes and industries, particularly in the southwestern and southern parts of Nigeria.
The award ceremony, held on Tuesday in Abuja, saw the NMDPRA’s Authority Chief Executive, Ahmed Farouk, announce that companies like the Nigerian National Petroleum Company Limited (NNPC), Shell, Nipco, Central Horizon Gas Company (CHGC), Falcon, and Axxela were granted the licenses. These areas are strategically connected to the Escravos-Lagos Pipeline System, which provides a reliable natural gas supply.
Of the 30 applications received, 20 were screened out, leaving the top 10 as recipients who will spearhead the first phase of the nation’s ambitious gas expansion initiative. This initiative aims to increase gas distribution to meet growing domestic energy demand and support various sectors like power generation, industrial growth, and cleaner cooking solutions.
The gas distribution zones covered by the licenses include the Agrara, Ota, and Badagry Local Gas Distribution Zone, operated jointly by NNPC and Shell, with a capacity of 102 million standard cubic feet per day (MMSCF/D). Other key zones include the Greater Lagos Industrial Area (GLIAS), operated by NNPC and Gaslink, with a capacity of 130 MMSCF/D, and the Kara Bridge-Ibafo-Sagamu Interchange Zone, operated by NNPC and Nipco, with a capacity of 150 MMSCF/D.
In total, these licenses will enable the distribution of over 1.5 billion cubic feet of gas per day (BSCF/D) through a 1,200 km gas pipeline network, with over 500 customer stations. Ahmed Farouk emphasized that the licenses will facilitate the development of the domestic gas market, supporting industries, energy transition plans, and creating opportunities for profitable investments.
The gas distribution initiative is expected to boost the nation’s energy sector, improve access to clean cooking, and reduce reliance on inefficient fuel sources, which have claimed the lives of thousands across Africa. The government aims to address the lack of access to clean cooking, especially for women and children, with the project expected to improve economic transformation and industrial competitiveness.
In addition, the Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, highlighted the importance of this initiative, noting that it aligns with the 2023 Gas Distribution Regulations and contributes to Nigeria’s energy transition efforts.
As part of efforts to boost gas distribution, the Group Chief Executive Officer of NNPC Limited, Mele Kyari, revealed plans for a $500 million investment in the construction of five liquefied natural gas (LNG) plants in Ajaokuta, Kogi State. This project is expected to further enhance gas supply to the newly licensed zones.