NMDPRA issues gas distribution licences to six 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.

The GDL as provided in Sections 148 -152 of the PIA is a licence that gives exclusive right to establish, construct and operate a gas distribution system in a designated local gas distribution zone (GDZ).

NMDPRA issued the licences to NNPC Gas Marketing Company, Shell Nigeria Gas Limited, NIPCO Plc., Central Horizon Gas Company, Falcon Corporation Ltd, and AXXELA.

Speaking at the award ceremony in Abuja on Tuesday, Farouk Ahmed, chief executive officer (CEO) of NMDPRA, said over 30 applications were received, and due diligence was conducted on them in line with defined prerequisites.

“The licences being issued today will support the ‘last mile’ expansion, crucial in completing an efficient and interconnected gas network across the country,” Ahmed said.

“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.”

‘DISTRIBUTION LICENCES WILL MEET 500 CUSTOMER STATIONS’

Ahmed said a cumulative gas distribution capacity of approximately 1.5 billion standard cubic feet (bscf) per day with over 1,200km of gas distribution pipeline network as well as over 500 customer stations were covered by the licences issued.

“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,” he added.

“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 fulfilment of PIA provisions and Gas Distribution Regulations 2023.”

On his part, Ekperikpe Ekpo, minister of state for petroleum resources (gas), said Section 148 of the Petroleum Industry Act (PIA 2021), mandated the NMDPRA to issue GDLs to qualified individuals and organisations.

Ekpo quoted the African Development Bank (AfDB), saying “over 600,000 women and children die annually in Africa due to lack of access to clean cooking while an estimated 1.2 billion women lack access to clean cooking”.

“The continued exposure to carbon monoxide during cooking leads to very severe air pollution and this is the leading cause of death among women and children,” Ekpo said.

The minister said the licence award was a testament to the federal government’s commitment to implementing the PIA 2021 in full alignment with the gas distribution regulations of 2023.