NMDPRA issues gas distribution licences to 6 companies

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has awarded 10 Gas Distribution Licences (GDLs) to six companies to deepen gas utilisation and expansion in the country.

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 Limited, Shell Nigeria Gas Limited, NIPCO Plc, Central Horizon Gas Company, Falcon Corporation Limited, and AXXELA.

Speaking at the award ceremony in Abuja on Tuesday, January 28, 2025, the Chief Executive Officer of NMDPRA, Farouk Ahmed, said over 30 applications were received, and due diligence was conducted on them in line with defined prerequisites.

Ahmed said: “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.”

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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 NMDPRA boss added: “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.”

The Star