The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has awarded 10 Gas Distribution Licences (GDLs) to six companies to increase gas utilisation and expansion in the country.
The licenses were issued in a ceremony on Tuesday, in Abuja.
The GDL as a provision of the Petroleum Industry Act (PIA) is a license that gives exclusive rights to establish, construct, and operate a gas distribution system in a designated local Gas Distribution Zone (GDZ).
As reported by the News Agency of Nigeria, the six beneficiary companies include:
- The NNPC Gas Marketing Company
- Shell Nigeria Gas Limited
- NIPCO Plc
- Central Horizon Gas Company
- Falcon Corporation Ltd.
- AXXELA
The Chief Executive of the NMDPRA, Farouk Ahmed, said the beneficiaries were selected from a pool of over 30 applicants in line with defined requirements.
“The licenses being issued today will support the ‘last mile’ expansion, crucial in completing an efficient and interconnected gas network across the country.
“Ten licenses 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,’’ he said.
1,200km of gas pipeline network covered
The NMDPRA boss disclosed that the newly awarded licenses issued cover 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.
- He added that the GDL regime aims to enable gas supplies to energy-intensive industries, industrial parks, special economic zones, embedded/captive power generation, Compressed Natural Gas mobility schemes, and other downstream gas utilisation programmes.
“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,” he explained.
- He noted that the authority will monitor tariff setting, and safety standards by the companies “to ensure the efficient and transparent operation of the Gas Distribution Network.”
He further disclosed that another set of licenses will be issued soon “after the conduct of necessary regulatory reviews, and the fulfillment of PIA provisions and Gas Distribution Regulations 2023.”
GDL to boost access to clean cooking, CNG mobility
Also speaking at the event, the Minister of State, Petroleum Resources (Gas), Ekperikpe Ekpo, noted that licenses to explore the gas distribution zones will boost access to clean cooking, CNG mobility, and improve power generation.
“These licenses, issued under the Petroleum Industry Act, will unlock opportunities in power generation, clean cooking, CNG mobility, and energy parks.”
He said through President Bola Tinubu’s Liquefied Petroleum Gas (LPG) penetration programme, gas will be piped directly to homes and industrial centres across the country.
“Gas Reticulation replaces gas cylinders as gas is piped to homes and businesses,” he added.
The Minister noted that this development reinforces the government’s commitment to leveraging natural gas for sustainable development in Nigeria.
What you should know
- Gas is a clean source for cooking, however, only about 25% of Nigerians use gas for cooking.
- About 150 million Nigerians rely on biomass, especially firewood and charcoal for cooking. The Carbon Monoxide emitted during cooking leads to very severe air pollution and the effect on respiratory health is a leading cause of death among women and children’’.
- Nairametrics reported that over 600,000 women and children die annually in Africa due to lack of access to clean cooking, according to the President of the African Development Bank, Akinwunmi Adesina.
