FG Awards 25-Year Gas Distribution Licenses to Expand Domestic Energy Supply
The Federal Government has issued 25-year gas distribution licenses to multiple companies, covering 10 franchise areas across Lagos, Ibadan, Port Harcourt, and Benin. The move aims to strengthen Nigeria’s domestic gas infrastructure by facilitating the establishment, construction, and operation of gas distribution networks.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which granted the licenses, revealed that over 30 companies applied, with beneficiaries including NNPC, Shell, Central Horizon Gas Company, Falcon, Axxela, and NIPCO. The selected areas are already linked to the Escravos-Lagos Pipeline System (ELPS), ensuring smooth integration into existing infrastructure.
Speaking at the license award ceremony in Abuja, Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, described the initiative as a critical component of the federal government’s “last mile” gas expansion program. He emphasized that the program seeks to increase natural gas accessibility for households and businesses, driving economic growth.
“These licenses grant exclusive rights to develop, construct, and operate gas distribution systems within designated zones, ensuring non-discriminatory access to natural gas. This milestone aligns with the Petroleum Industry Act (PIA) and the 2023 Gas Distribution Regulations, advancing Nigeria’s energy transition goals,” Ekpo stated.
NMDPRA’s Authority Chief Executive, Engr. Farouk Ahmed, highlighted the anticipated impact of the licenses, noting that they would enable the distribution of over 1.5 billion cubic feet of gas daily through a 1,200-kilometer pipeline network and more than 500 customer stations.
Ahmed added that the licensing regime is expected to bolster Nigeria’s domestic gas market, supplying industries, industrial parks, special economic zones, and compressed natural gas (CNG) mobility schemes. He also emphasized its potential to create investment opportunities, generate employment, and maximize the socio-economic benefits of Nigeria’s gas resources.
“These licenses will lay a solid foundation for long-term growth, unlocking the full potential of our natural gas reserves, fostering technological advancements, and creating new revenue streams and employment opportunities,” Ahmed noted.
Public-private partnerships will play a key role in driving these developments, with the government providing regulatory oversight and funding through the Midstream and Downstream Gas Infrastructure Fund while private companies contribute technical expertise and investments.
Meanwhile, Group CEO of NNPC Limited, Mallam Mele Kyari, announced plans to invest approximately $500 million in partnership with other stakeholders to develop five Liquefied Natural Gas (LNG) plants in Ajaokuta, Kogi State. Represented by Executive Vice President for Gas and Power, Ogunleye Olalekan, Kyari assured license holders of a steady gas supply across the franchise zones.
He urged stakeholders and investors to support the government’s vision for enhanced gas utilization, describing the sector as a “huge opportunity space” for economic growth and development.
The newly issued licenses mark a significant step toward Nigeria’s ambition to harness natural gas as a key driver of its energy transition and economic transformation.
