- The Nigerian government awarded 25-year gas distribution licences to 10 companies, boosting domestic gas use across key regions like Lagos, Port Harcourt, and Benin City
- The licences aim to expand gas access for homes and businesses in southwestern and southern Nigeria, contributing to a cleaner energy transition
- Top companies, including NNPC, Shell, and Nipco, will oversee over 1,200 km of gas distribution pipelines, supporting energy-intensive industries and improving power generation
The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has granted 25-year gas distribution licences to 10 companies in a move aimed at enhancing domestic gas utilisation across the country.
The licences, issued on Tuesday, January 28 in Abuja, will enable these companies to establish, construct, and operate gas distribution networks in key regions of Nigeria.
The awarded licences cover franchise areas in Lagos, Ibadan, Port Harcourt, and Benin City, with a primary goal of ensuring that natural gas reaches households and industries in the southwestern and southern parts of the country.
The initiative is part of Nigeria's broader effort to expand its gas distribution network and support its energy transition plans.
Speaking at the award ceremony, Ahmed Farouk, the Chief Executive Officer of NMDPRA, revealed that prominent companies such as the Nigerian National Petroleum Company Limited (NNPC), Shell, Nipco, Central Horizon Gas Company (CHGC), Falcon, and Axxela were among the recipients of the licences.
These companies will oversee gas distribution across areas already connected to the Escravos-Lagos Pipeline System.
Out of 30 applications submitted, 20 were disqualified, leaving the top 10 companies to spearhead the first phase of the country’s gas expansion initiative.
The successful applicants will collectively manage a gas distribution network covering over 1,200 kilometres and more than 500 customer stations.
Key clusters set to benefit from the new licences include:
- Agrara, Ota, and Badagry Local Gas Distribution Zone, operated by NNPC and Shell, with a capacity of 102 million standard cubic feet per day (MMSCF/D).
- Greater Lagos Industrial Area (GLIAS Local Gas Distribution Zone), a joint venture between NNPC and Gaslink, with a capacity of 130 MMSCF/D.
- Ikorodu Local Gas Distribution Zone, operated by NNPC and Falcon, with a capacity of 25 MMSCF/D.
- Kara Bridge-Ibafo-Sagamu Interchange Local Gas Distribution Zone, managed by NNPC and Nipco, with a capacity of 150 MMSCF/D.
- Lekki Free Trade Zone Local Gas Distribution Zone, operated by NNPC and Nipco, with a capacity of 25 MMSCF/D.
- Ogere-Ibadan-Oluyole-Olorisako-Asuire-Ajoda Local Gas Distribution Zone, managed by NNPC and Nipco, with a capacity of 150 MMSCF/D.
- Port Harcourt Cluster 2, operated by CHGC, with a capacity of 50 MMSCF/D.
- Port Harcourt Cluster 1, managed by Shell, with a capacity of 30 MMSCF/D.
- Ada Local Gas Distribution Zone, managed by NNPC, with a capacity of 30 MMSCF/D.
- Benin Local Gas Distribution Zone, operated by Nipco, with a capacity of 20 MMSCF/D.
In total, the licences are expected to facilitate the distribution of over 1.5 billion cubic feet of gas per day, contributing to the country’s growing domestic gas market.
Farouk noted that this initiative will support energy-intensive industries, improve power generation, and promote cleaner, more efficient energy across the nation.
The NMDPRA's Chief Executive highlighted that the new gas distribution framework is poised to create significant investment opportunities, enhance socio-economic development, and drive long-term growth in Nigeria's energy sector.
The licences also serve as a catalyst for investments in pipeline infrastructure, offering continuous, cost-effective, and safe gas supply to industries and households alike.
Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, emphasised that the gas distribution licence regime is a crucial component of the federal government's "last mile" gas expansion programme.
The programme is designed to bring gas supply closer to Nigerians, ensuring greater accessibility to clean cooking and power solutions.
Ekpo also highlighted the importance of the programme in reducing carbon monoxide exposure, which contributes to the deaths of 600,000 women and children across Africa annually due to the lack of access to clean cooking.
Meanwhile, Mele Kyari, Group Chief Executive Officer of NNPC Limited, assured stakeholders of a steady supply of gas across the franchise zones, citing the company's ongoing investment of $500 million in the development of liquefied natural gas plants in Ajaokuta, Kogi State.
Kyari urged all sector participants to collaborate in supporting the federal government's efforts to improve gas supply and utilisation.
Nigerian government targets $10b to achieve stable power supply to citizens
Meanwhile, TheRadar earlier reported that the Federal Government was banking on the Public-Private Partnership (PPP) arrangement to bridge the investment gap in the power sector.
The Minister of Power, Adebayo Adelabu, who said that the government would need $10 billion to provide uninterrupted power, described the challenges in the power sector as enormous, including attacks by vandals of transmission facilities and other infrastructure.
