The Federal Government yesterday issued 25-year gas distribution licences to companies covering 10 franchise areas in Lagos, Ibadan, Port Harcourt and Benin for the establishment, construction and operations of gas distribution networks.
Benefiting companies include NNPC, Shell, Central Horizon Gas Company, Falcon, Axxela and NIPCO.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, which issued the licences, said it received over 30 applications from companies, adding that the areas awarded were those already connected to the Escravos-Lagos Pipeline System, ELPS.
Speaking at the award ceremony in Abuja, the Minister of State Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, said the licence regime, which is part of the federal government’s “last mile” gas expansion programme, is expected to bring gas supply closer to Nigerians across the country.
Ekpo noted that the licences provide “an exclusive right to establish, construct, and operate gas distribution systems and ensure the non-discriminatory distribution and sale of natural gas within designated local distribution zones. Today’s event is a testament to our commitment to implementing the PIA in full alignment with the Gas Distribution Regulations of 2023.
He pointed out that the “issuance of the Gas Distribution License comes at a pivotal moment as we intensify efforts to harness the potential of gas as a critical resource for Nigeria’s energy transition and economic transformation.”
Speaking earlier, the Authority Chief Executive, NMDPRA, Engr. Farouk Ahmed disclosed that the licences would enable the distribution of over 1.5 billion cubic feet of gas per day through a 1,200km of gas pipeline network and more than 500 customer stations.
Ahmed stated, “This licence 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 utilization program.
“We appreciate that this licence regime shall not only support the accelerated development of our domestic gas market, but that it shall create opportunities for profitable investment for various classes of stakeholders, improve the socio-economic impact of gas resources across Nigeria, and support our national energy processing sectors.
Ahmed explained that the gas distribution licence regime “are expected to lay a solid foundation for long-term growth and prosperity, unlock the full potential of our natural gas reserves, enable the development of new and tech markets, and create new sources of revenue and employment for our nation.
“These licences are expected to be a catalyst for investments. Pipeline natural gas provides continuous supply, is cost-effective, safer, and eliminates storage challenges”, he added.
He stated that NMDPRA will continue “encourage public-private partnership to speed up the development of gas infrastructure, with the Government playing a vital role in providing support through regulatory oversight, a mid- and downstream gas infrastructure fund which is embedded under the Authority, while private sector or private companies will bring in expertise and investments needed to drive the projects forward.”
NNPC partners invest $500m in Kogi
Also, speaking at the event, Mallam Mele Kyari, Group CEO of NNPC Limited, disclosed that as part of efforts to boost gas distribution, the company and its partners would invest about $500 million to set up five Liquefied Natural Gas plants in Ajaokuta, Kogi State.
Kyari who was represented at the event by Executive Vice President, Gas and Power, Ogunleye Olalekan assured the licence holders of adequate supply of gas across the franchise zones.
He urged stakeholders, investors and companies operating in the sector to support the Federal Government’s plans to improve gas supply and utilisation, adding that the gas sector “is a huge opportunity space.”
