The Nigerian government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has granted 25-year gas distribution licenses to 10 companies for the establishment and operation of gas networks.
These licenses, focused on promoting domestic gas use, cover franchise areas in Lagos, Ibadan, Port Harcourt, and Benin City.
The goal is to ensure natural gas reaches homes and industries in the southwestern and southern regions of Nigeria.
During the award ceremony on Tuesday in Abuja, the Chief Executive Officer of NMDPRA, Ahmed Farouk, stated that companies including the Nigerian National Petroleum Company Limited, Shell, Nipco, Central Horizon Gas Company, Falcon, and Axxela were granted the 25-year gas distribution licenses.
He also mentioned that the awarded areas are already connected to the Escravos-Lagos Pipeline System.
Out of 30 applications received, 20 were screened out, leaving the top 10 recipients to lead the first phase of Nigeria’s gas expansion initiative.
In his keynote address, Ahmed revealed that the licenses would allow for the distribution of over 1.5 billion cubic feet of gas per day through a 1,200 km gas pipeline network and more than 500 customer stations.
“Ten licenses are being issued today as part of Phase 1 of the Gas Distribution Licensing regime to operators who have invested significantly in developing gas distribution infrastructures in the designated Gas Distribution Zones and have met the prescribed minimum requirements.
“A cumulative gas distribution capacity of approximately 1.5 bscf/d with over 1,200 km of gas distribution pipeline network as well as over 500 customer stations are covered by the licenses being issued today.
“This license 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 utilisation programme.
“We appreciate that this license 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 stated.
Among the clusters, the Agrara, Ota, and Badagry Local Gas Distribution Zone will be operated jointly by NNPC and Shell, with a capacity of 102 million standard cubic feet per day. The Greater Lagos Industrial Area (GLIAS Local Gas Distribution Zone), with a capacity of 130 MMSCF/D, will be operated by NNPC and Gaslink.
The Ikorodu Local Gas Distribution Zone, managed by NNPC and Falcon, has a capacity of 25 MMSCF/D.
Meanwhile, the Kara Bridge-Ibafo-Sagamu Interchange Local Gas Distribution Zone, with a capacity of 150 MMSCF/D, will be operated by NNPC and Nipco.
The Lekki Free Trade Zone Local Gas Distribution Zone will be operated by NNPC and Nipco, with a capacity of 25 MMSCF/D.
Additionally, the Ogere-Ibadan-Oluyole-Olorisako-Asuire-Ajoda Local Gas Distribution Zone, managed by NNPC and Nipco, has a capacity of 150 MMSCF/D.
In the South-South region, the Port Harcourt Cluster 2 Local Gas Distribution Zone, operated by CHGC, has a capacity of 50 MMSCF/D.
The Port Harcourt Cluster 1 Local Gas Distribution Zone, managed by Shell, will have a capacity of 30 MMSCF/D.
The Port Harcourt Cluster 1 Local Gas Distribution Zone, managed by Shell, will operate with a capacity of 30 MMSCF/D.
The Ada Local Gas Distribution Zone, with a capacity of 30 MMSCF/D, will be managed by NNPC.
Lastly, the Benin Local Gas Distribution Zone will be operated by Nipco, with a capacity of 20 MMSCF/D.
Ahmed explained that the gas distribution license regime “is 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 licenses are expected to be a catalyst for investments. Pipeline natural gas provides continuous supply, is cost-effective, is safer, and eliminates storage challenges”, he added.
