Nigerian Government Grants Ten Businesses 25-Year Gas Distribution Licences
The Nigerian government has recently approved ten businesses to receive a 25-year gas distribution licence to establish, build, and operate gas distribution networks through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The aim of these licences is to promote the utilization of domestic gas and they cover franchise zones in Benin City, Lagos, Ibadan, and Port Harcourt.
These licences are crucial to ensuring that natural gas reaches households and businesses in clusters in the southern and southwestern regions of Nigeria.
The licenses were granted to key industry players such as the Nigerian National Petroleum Company Limited, Shell, Nipco, Central Horizon Gas Company, Falcon, and Axxela. The announcement of the award ceremony was made by Ahmed Farouk, the Chief Executive of the NMDPRA, in Abuja on Tuesday.
According to Farouk, the areas that were awarded licences were already connected to the Escravos-Lagos Pipeline System.
Out of 30 applicants, 20 were filtered out, and the top 10 grantees will spearhead the initial phase of this initiative, which is part of the country’s gas expansion project.
Credit: TheCable
NNPC and Shell will collaborate to operate the Agrara, Ota, and Badagry Local Gas Distribution Zone with a daily capacity of 102 million standard cubic feet. NNPC and Gaslink will manage the Greater Lagos Industrial Area (GLIAS Local Gas Distribution Zone) with a capacity of 130 MMSCF/D.
NNPC and Falcon will oversee the Ikorodu Local Gas Distribution Zone with a capacity of 25 MMSCF/D. Similarly, NNPC and Nipco will manage the 150 MMSCF/D Kara Bridge-Ibafo-Sagamu Interchange Local Gas Distribution Zone.
The Lekki Free Trade Zone Local Gas Distribution Zone with a capacity of 25 MMSCF/D will be operated by NNPC and Nipco. NNPC and Nipco will also be in charge of the Ogere-Ibadan-Oluyole-Olorisako-Asuire-Ajoda Local Gas Distribution Zone, which has a capacity of 150 MMSCF/D.
CHGC will operate the Port Harcourt Cluster 2 Local Gas Distribution Zone in the South-South zone with a capacity of 50 MMSCF/D. The Port Harcourt Cluster 1 Local Gas Distribution Zone with a capacity of 30 MMSCF/D will be managed by Shell.
NNPC will oversee the Ada Local Gas Distribution Zone with a capacity of 30 MMSCF/D, and Nipco will run the Benin Local Gas Distribution Zone with a capacity of 20 MMSCF/D.
In his address, Ahmed highlighted that these licences will enable the daily distribution of over 1.5 billion cubic feet of gas through more than 500 customer stations and a 1,200-kilometre network of gas pipelines.
He stated, “The licenses being granted today cover more than 500 customer stations, more than 1,200 km of gas distribution pipeline network, and a cumulative gas distribution capacity of roughly 1.5 bscf/d.”
“The gas supply to our energy and testing industries, industrial parks, special economic zones, embedded captive power generation, mobility CNG schemes, and other downstream gas utilization programs present a significant opportunity for this license regime to support the growth of our domestic gas market.”
According to Ahmed, the gas distribution licence regime is expected to pave the way for long-term growth and prosperity, tapping into the full potential of Nigeria’s natural gas reserves, fostering the development of new markets, and creating new avenues for revenue and employment.
He emphasized that these licences will attract investments as pipeline natural gas offers a reliable supply, cost-effectiveness, safety, and eliminates storage challenges.
