FG Grants NNPC, Shell, 4 Others Licence for Gas Distribution
- In an attempt to strengthen the country's gas consumption campaign, the Nigerian government granted 10 gas distribution licenses to six companies
- The beneficiaries are Axxela, NIPCO Plc, Central Horizon Gas Company, Falcon Corporation Limited, NNPC Gas Marketing Limited, and Shell Nigeria Gas Limited
- The initiative's objective, according to the Minister of State for Petroleum Resources (Gas), is to increase power availability across the nation
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Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Nigerian government gave six businesses ten gas distribution licenses (GDL) on Tuesday, January, 28th 2025 to boost the nation's gas consumption campaign.
Source: UGC
The beneficiary companies are: Axxela, NIPCO Plc, Central Horizon Gas Company, Falcon Corporation Limited, NNPC Gas Marketing Limited, and Shell Nigeria Gas Limited.
The government claims that the GDL, which is granted to qualified applicants to distribute gas at the "last mile," is a license that grants the sole right to establish, build, and run a gas distribution system in a designated local Gas Distribution Zone (GDZ) as stipulated in Sections 148–152 of the Petroleum Industry Act (PIA).
Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), spoke at the award ceremony in Abuja according to a Premium Times report.
He explained that the initiative's goal is to enhance power availability throughout the country by facilitating an affordable and dependable energy supply that will boost industrial growth, competitiveness, and support for the production of cleaner and more efficient energy.
According to him, this is anticipated to hasten Nigeria's transition to compressed natural gas (CNG) as a sustainable fuel substitute for vehicles.
“The issuance of the Gas Distribution License comes at a pivotal moment as we intensify efforts to harness the potential of gas as a critical resource for Nigeria’s energy transition and economic transformation. By empowering license holders, this initiative opens extensive opportunities across several key sectors,” Mr Ekpo said.
Need for a robust domestic gas market
According to the minister, the country's aspirations under the decade of gas initiative cannot be realized without a robust domestic gas market. He also said that the framework for gas distribution licenses is a strategic enabler for this vision, as it extends the reach of gas infrastructure to underserved areas and deepens gas consumption across the residential, commercial, and industrial sectors.
“As we issue the Gas Distribution License to qualified stakeholders today, we reaffirm our commitment to the sustainable development of Nigeria’s vast gas resources and to open up further investments in the gas space.
“This step is not just about meeting regulatory requirements; it is about building a future where gas serves as a foundation for economic growth, industrialisation, and improved quality of life for all Nigerians,” he added.
Farouk Ahmed, the chief executive of the NMDPRA, stated in his remarks that the organization received more than 30 applications and that due diligence was done on them in accordance with predetermined standards.
“Ten licences are being issued today as part of Phase-1 of the Gas Distribution Licensing regime to operators who have invested significantly in developing gas distribution infrastructures in the designated gas distribution zones and have met the prescribed minimum requirements,” Mr Ahmed said.
According to him, the license includes more than 500 customer stations, more than 1,200 km of gas distribution pipeline network, and a total gas distribution capacity of roughly 1.5 bscf/d.
Through gas supply to our energy-intensive industries, industrial parks, special economic zones, embedded/captive power generation, mobility CNG schemes, and any other downstream gas utilization program, he pointed out that the GDL regime offers a substantial opportunity to support the growth of the domestic gas market.
“We envisage that this licence regime shall not only support the accelerated development of our domestic gas market but that it shall create opportunities for profitable investments for various classes of stakeholders, improve the socio-economic impact of gas resources across Nigeria and support our national energy transition plans.
“The GDLs are expected to lay a solid foundation for long-term growth and prosperity, unlock the full potential of our natural gas reserves, enabling the development of new, untapped markets and creating new sources of revenue and employment. These licenses are expected to catalyse investments.
“The GDLs will play an instrumental role in ensuring that Nigeria’s energy future is not just sustainable, but also equitable and accessible to all Nigerians,” he said.
According to Ahmed, PNG offers a steady supply, is safe and affordable, and removes storage issues.
“These advantages will not only increase efficiency in how we use energy but will also be essential in meeting Nigeria’s growing energy demands.”
NNPC launches 6 filling stations to buy cheap gas
Legit.ng reported that the Presidential Compressed Natural Gas Initiative (PCNGi) has announced that the Nigerian National Petroleum Company Limited retail company has launched six new CNG refuelling units in Lagos.
In a statement released on X, the PCNGi said the first two stations, located in Fola-Agoro and Agege, are already operational, with the remaining four will be to open before the end of the month(January).
President Bola Tinubu has consistently urged Nigerians to switch to using CNG, stating that it will save the country over N2 trillion in funds currently spent on importing Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO).
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Source: Legit.ng
