Last weekend, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) marked a significant milestone by granting its first wholesale gas supply license, authorizing Ohuru Trading Limited, a local firm, to supply 500 million standard cubic feet of gas per day.
This groundbreaking development was officially communicated by the regulatory body through its verified LinkedIn page.
NMDPRA confirmed that Ohuru Trading Limited secured this license, making history as the premier company to apply for and receive such a third-party gas license.
The issuance of this license by NMDPRA to Ohuru Trading Limited was executed by Section 142 of the Petroleum Industry Act (PIA).
This particular provision governs the issuance of licenses, serving as a guiding framework for commercial operations within the gas value chain.
Farouk Ahmed, the Chief Executive of NMDPRA, expressed that Ohuru Trading met all stipulated requirements before the license’s approval.
Meanwhile, during the license issuance ceremony, Honorable Ekperikpe Ekpo, Nigeria’s Minister of State for Gas, commended NMDPRA for its resolute commitment to effectively implementing the PIA and fostering sustainable growth within the Nigerian Oil and Gas industry.
Farouk Ahmed further emphasized that this license issuance underscores the government’s dedication to attracting Foreign Direct Investments (FDIs) and diverse forms of capital infusion into the domestic economy.
Additionally, it aligns with the overarching goal of enhancing the quality of life for the Nigerian populace.
He said:
- “Under the above (PIA), we are pleased to inform you today that the authority is undertaking a significant milestone as stipulated in section 142, which states that the authority may upon approval of an application and payment of prescribed fees, grant and issue a Wholesale Gas Supply License to a qualified applicant.
- “In line with the above, Ohuru Trading Limited’s application for the Wholesale Gas Supply License was approved after due consideration and upon fulfilment of the stipulated requirements.
- “The commercial licenses as provided for in the PIA in general and the Wholesale Gas Supply License, in particular, are significant in many respects as they underscore the focus and priority attention placed on commercial activities in the oil and gas space.
- “We believe that this will encourage prospective applicants to turn in their requests for other commercial licenses introduced by the Act and domiciled with the authority,”
What the license issuance means
Mariah Lucciano-Gabriel, the Chief Commercial Officer at Ohuru Trading Limited, said the license would enable the firm to sell gas on a wholesale basis.
She said:
- “So, what this means for us is that we can aggregate quantities of gas, different leases, and different third parties and supply predominantly to the domestic market.
- “This wholesale supply license gives us the leverage to be able to supply gas to the power sector and the fertilizer industry, we can aggregate pockets of stranded gas from different fields and then channel it to areas where it is most needed.
- “Now, most of the people we have in our portfolio are power companies and we are quite focused on supplying gas to a lot of the power firms to move the nation forward. So, the supply license legitimizes us to be able to do that.
- “In terms of quantity, our license gives us the remit to trade up to 500 million standard cubic feet of gas per day, and we are not just relying on the gas aggregator, no, we are going to be talking to individual OMLs (Oil Mining Leases).
- “But that does not mean we are not going to be able to deal with the gas aggregator as well, we can. But this gives us the right to approach individual Oil Mining Leases and third parties as well.
- “For now, we probably will be relying on the NGC (Nigeria Gas Company) pipeline network, but as time goes on and as our supply situation gets more stable, we might begin to put our pipelines in place.”