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The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Tuesday, January 28, 2025, awarded 10 Gas Distribution Licences (GDLs) to six companies to deepen gas utilisation and expansion in the country.
The Gas Distribution Licence is being issued to qualified applicants to distribute gas at the “last mile”.
The GDL as provided in Sections 148 -152 of the PIA is a license that gives exclusive right to establish, construct and operate a gas distribution system in a designated local Gas Distribution Zone (GDZ).
The beneficiary companies include the NNPC Gas Marketing Company, Shell Nigeria Gas Limited, NIPCO Plc., Central Horizon Gas Company, Falcon Corporation Ltd. and AXXELA.
Speaking at the award ceremony in Abuja, Mr. Farouk Ahmed, Authority Chief Executive, NMDPRA, said over 30 applications were received, and due diligence was conducted on them in line with defined prerequisites.
“The licences being issued today will support the ‘last mile’ expansion, crucial in completing an efficient and interconnected gas network across the country.
“Ten licences are being issued today as part of Phase one of the GDL regime to operators who have invested significantly in developing gas distribution infrastructures in the designated GDZ and have met the prescribed minimum requirements,” he said.
Ahmed said a cumulative gas distribution capacity of approximately 1.5 bscf/d with over 1,200km of gas distribution pipeline network as well as over 500 customer stations were covered by the licences issued.
“The GDL regime holds a significant opportunity of developing domestic gas market through the supply of gas to the energy-intensive industries, industrial parks, special economic zones, embedded/captive power generation, Compressed Natural Gas mobility schemes and other downstream gas utilisation programme.
“Piped Natural Gas (PNG) provides continuous supply, is cost effective, safer and eliminates storage challenges. These advantages will not only increase efficiency in how we use energy but will also be essential in meeting Nigeria’s growing energy demands.
“To ensure the efficient and transparent operation of the Gas Distribution Network, the authority will monitor tariff setting, and safety standards to govern the operation of the GDLs.
“As we are issuing these first sets of licences, we have commenced the processing of subsequent sets to be issued after the conduct of necessary regulatory reviews, and the fulfillment of PIA provisions and Gas Distribution Regulations 2023,” he said.
Mr. Ekperikpe Ekpo, Minister of State, Petroleum Resources (Gas), said section 148 of the Petroleum Industry Act (PIA 2021), mandated the NMDPRA to issue GDLs to qualified individuals and organisations.
Ekpo quoted the African Development Bank, saying “over 600,000 women and children die annually in Africa due to lack of access to clean cooking while estimated 1.2 billion women lack access to clean cooking.
“The continued exposure to Carbon Monoxide during cooking leads to very severe air pollution and this is the leading cause of death among women and children.”
The minister said the license award was a testament to the Federal Government’s commitment to implementing the PIA 2021 in full alignment with the Gas Distribution Regulations of 2023.
“By empowering license holders, this initiative opens extensive opportunities across several key sectors: namely – Energy-Intensive Industries, Power Generation, Clean Cooking Initiative and Promote Gas Reticulation.”
He said in order to give access to clean cooking options, President Bola Tinubu’s Liquefied Petroleum Gas (LPG) penetration programme began in Sept. 2024 with the goal of distributing LPG throughout the six geopolitical zones and 774 LGAs.
“Gas Reticulation replaces gas cylinders as gas is piped to homes and businesses.
“It will accelerate the adoption of CNG mobility as a sustainable fuel alternative in transportation and catalyse investments in pipelines, storage, and other critical infrastructure required to support gas distribution,” he said.
By Emmanuella Anokam
