The Nigerian government has granted ten businesses a 25-year gas distribution licence to establish, build, and run gas distribution networks through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The licenses, which are intended to encourage the use of domestic gas, are valid for franchise zones in Benin City, Lagos, Ibadan, and Port Harcourt.
It is to guarantee that natural gas reaches the final mile in residences and businesses in clusters in the country’s south and southwest.
The licenses were given to the Nigerian National Petroleum Company Limited, Shell, Nipco, Central Horizon Gas Company, Falcon, and Axxela, according to Ahmed Farouk, the Authority Chief Executive of the NMDPRA, who announced the award ceremony on Tuesday in Abuja.
“Areas that were already connected to the Escravos-Lagos Pipeline System were the areas that were awarded,” he stated.
The top 10 grantees will lead the initial phase of this effort, which is focused on the nation’s gas expansion initiative, after 20 of the 30 applicants were filtered out.
With a daily capacity of 102 million standard cubic feet, NNPC and Shell will work together to operate the Agrara, Ota, and Badagry Local Gas Distribution Zone. Operating the Greater Lagos Industrial Area (GLIAS Local Gas Distribution Zone) would be NNPC and Gaslink, with a capacity of 130 MMSCF/D.
With a 25 MMSCF/D capacity, the Ikorodu Local Gas Distribution Zone is run by NNPC and Falcon.
Similarly, NNPC and Nipco would oversee the 150 MMSCF/D Kara Bridge-Ibafo-Sagamu Interchange Local Gas Distribution Zone.
Operating with a capacity of 25 MMSCF/D, the Lekki Free Trade Zone Local Gas Distribution Zone will be run by NNPC and Nipco.
The NNPC and Nipco are also in charge of the Ogere-Ibadan-Oluyole-Olorisako-Asuire-Ajoda Local Gas Distribution Zone, which has a 150 MMSCF/D capacity.
With a capacity of 50 MMSCF/D, CHGC operates the Port Harcourt Cluster 2 Local Gas Distribution Zone in the South-South zone.
Under Shell’s management, the Port Harcourt Cluster 1 Local Gas Distribution Zone will have a 30 MMSCF/D capacity.
The NNPC will oversee the Ada Local Gas Distribution Zone, which has a 30 MMSCF/D capacity.
Lastly, Nipco will run the Benin Local Gas Distribution Zone, which has a 20 MMSCF/D capacity.
In his keynote speech, Ahmed revealed that the permits will allow for the daily distribution of more than 1.5 billion cubic feet of gas via more than 500 customer stations and a 1,200-kilometre network of gas pipelines.
“As part of Phase 1 of the Gas Distribution Licensing regime, ten licenses are being issued today to operators who have made significant investments in building gas distribution infrastructures in the designated Gas Distribution Zones and who have fulfilled the minimum requirements that have been prescribed,” Ahmed said.
“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 supply of gas to our energy and testing industries, industrial parks, special economic zones, embedded captive power generation, mobility CNG schemes, and any other downstream gas utilisation programme presents a substantial opportunity for this license regime to support the growth of our domestic gas market.
“We value that this licence regime will not only speed up the growth of our domestic gas market but also improve the socioeconomic impact of gas resources throughout Nigeria, support our national energy processing sectors, and open up profitable investment opportunities for different classes of stakeholders.”
The gas distribution licence regime, according to Ahmed, “is expected to lay a solid foundation for long-term growth and prosperity, unlock the full potential of our natural gas reserves, enable the development of new and tech markets, and create new sources of revenue and employment for our nation.”
It is anticipated that these licences will stimulate investment. He went on to say that pipeline natural gas offers a steady supply, is economical, safer, and removes storage issues.
