SpringNewsNG – March 9, 2025

In a bid to bolster Nigeria’s gas consumption campaign, the federal government on Tuesday, January 28, 2025, awarded ten Gas Distribution Licences (GDL) to six companies. The beneficiaries of the licenses include Axxela, NIPCO Plc, Central Horizon Gas Company, Falcon Corporation Limited, NNPC Gas Marketing Limited, and Shell Nigeria Gas Limited.

According to the government, the GDL grants its holders the exclusive rights to establish, build, and operate a gas distribution system within a designated local Gas Distribution Zone (GDZ), as stipulated in Sections 148–152 of the Petroleum Industry Act (PIA). The initiative aims to facilitate an affordable and reliable energy supply, thereby boosting industrial growth, competitiveness, and the transition to cleaner energy.

Speaking at the award ceremony in Abuja, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized that the issuance of these licenses marks a critical step in Nigeria’s energy transition and economic transformation.

“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. By empowering license holders, this initiative opens extensive opportunities across several key sectors,” Mr. Ekpo said.

Need for a Robust Domestic Gas Market

The minister highlighted that the success of the decade of gas initiative depends on the development of a strong domestic gas market. He noted that the framework for gas distribution licenses serves as a strategic enabler, extending gas infrastructure to underserved areas and increasing gas consumption across residential, commercial, and industrial sectors.

“As we issue the Gas Distribution License to qualified stakeholders today, we reaffirm our commitment to the sustainable development of Nigeria’s vast gas resources and to open up further investments in the gas space. This step is not just about meeting regulatory requirements; it is about building a future where gas serves as a foundation for economic growth, industrialisation, and improved quality of life for all Nigerians,” he added.

The Chief Executive of the http://Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, disclosed that over 30 applications were received and assessed based on stringent criteria.

“Ten licences 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,” Mr. Ahmed said.

He further explained that the licensees collectively control more than 500 customer stations and a gas distribution pipeline network exceeding 1,200 km, with a total distribution capacity of approximately 1.5 million standard cubic feet.

The GDL regime presents a significant opportunity for expanding the domestic gas market, particularly through energy-intensive industries, industrial parks, special economic zones, embedded/captive power generation, and mobility compressed natural gas (CNG) schemes.

“The GDLs will play an instrumental role in ensuring that Nigeria’s energy future is not just sustainable but also equitable and accessible to all Nigerians,” Mr. Ahmed noted.

According to him, pipeline natural gas (PNG) provides a steady, safe, and affordable supply while eliminating storage challenges, reinforcing the government’s vision of widespread gas adoption in Nigeria’s energy landscape.