The Nigerian government has taken a significant step to improve the distribution of natural gas across the country. Through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), they have granted a 25-year license to ten different companies. This license allows these companies to set up, build, and manage gas distribution networks, which are essential for delivering natural gas to homes and businesses.
The main goal of issuing these licenses is to encourage the use of natural gas within Nigeria. The areas that will benefit from this initiative include major cities such as Lagos, Ibadan, Port Harcourt, and Benin City. By ensuring that natural gas reaches even the most remote locations, the government aims to improve energy access for both households and industries in the southwestern and southern parts of Nigeria.
During a ceremony in Abuja, Ahmed Farouk, the Chief Executive of NMDPRA, announced the companies that received the licenses. These companies include well-known names like the Nigerian National Petroleum Company Limited (NNPC), Shell, Nipco, and several others. The awarded areas are already linked to an important gas pipeline system known as the Escravos-Lagos Pipeline System.
Out of 30 applications received, only 10 companies were selected to lead this first phase of the gas distribution initiative. This selection process involved screening and evaluating the applications to ensure that only the most capable companies were chosen.
Each of the awarded companies will manage specific local gas distribution zones, which have varying capacities for gas distribution. For example, the Agrara, Ota, and Badagry areas will be jointly managed by NNPC and Shell, and they will have the capacity to distribute 102 million standard cubic feet of gas per day. Other zones, like the Greater Lagos Industrial Area and the Kara Bridge-Ibafo-Sagamu Interchange, will also be operated by different combinations of these companies, with capacities ranging from 25 to 150 million standard cubic feet per day.
In total, the licenses will enable the distribution of over 1.5 billion cubic feet of gas each day through a network of approximately 1,200 kilometers of pipelines and more than 500 customer stations. This extensive network is expected to significantly enhance the domestic gas market in Nigeria, providing gas for various uses, including energy production, industrial operations, and even cleaner cooking options.
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Ahmed emphasized that this licensing initiative is a major opportunity for investment and economic growth. It aims to support the development of the domestic gas market, create jobs, and improve the overall socio-economic conditions across Nigeria. He also mentioned that using pipeline natural gas is more efficient, safer, and cost-effective compared to other methods of gas supply.
The NMDPRA plans to encourage partnerships between the government and private companies to expedite the development of gas infrastructure. The government will provide regulatory support, while private companies will contribute the necessary expertise and investment.
In his remarks, the Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, highlighted that this licensing program is part of the government’s broader strategy to expand gas access across Nigeria. He noted that the licenses give companies the exclusive right to establish and operate gas distribution systems, ensuring that natural gas is distributed fairly and efficiently.
This initiative comes at a crucial time as Nigeria seeks to harness the potential of natural gas to support its energy transition and economic development. The minister pointed out the serious health risks associated with the lack of access to clean cooking solutions, which has tragically resulted in numerous deaths in Africa. By empowering the licensed companies, the government hopes to improve energy supply for industries, enhance power generation, and ultimately transform the economic landscape of Nigeria.
