Lagos, Ibadan, Port Harcourt, and Benin City are among the key locations set to benefit from the Federal Government of Nigeria’s latest initiative to expand domestic gas utilisation. Through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), ten companies have been granted 25-year gas distribution licences, enabling them to establish, construct, and operate energy distribution networks across designated franchise regions. The development was announced at a ceremony in Abuja, where the Authority Chief Executive of NMDPRA, Ahmed Farouk, outlined the scope of the licences.
Meanwhile, only ten companies were chosen out of thirty applicants. These include major industry players such as the Nigerian National Petroleum Company Limited (NNPC), Shell, Nipco, Axxela, Falcon, and Central Horizon. The areas awarded were strategically chosen, focusing on locations already connected to the Escravos-Lagos Pipeline System to maximise efficiency and coverage. The companies are tasked with managing energy distribution zones across strategic clusters. For instance, the Agrara, Ota, and Badagry Local Gas Distribution Zone will be operated jointly by NNPC and Shell, with a capacity to distribute 102 million standard cubic feet daily.
Strategic zones to enhance industrial and domestic energy supply.
Similarly, the Greater Lagos Industrial Area Local Gas Distribution Zone, operated by NNPC and Gaslink, has a 130 MMSCF/D capacity. Other notable zones include the Ikorodu Local Gas Distribution Zone, managed by NNPC and Falcon, with a capacity of 25 MMSCF/D, and the Lekki Free Trade Zone, jointly operated by NNPC and Nipco, capable of distributing 25 MMSCF/D. In addition, the Kara Bridge-Ibafo-Sagamu Interchange Zone, operated by NNPC and Nipco, has a capacity of 150 MMSCF/D. In the South-South region, the Port Harcourt Cluster 2 Zone, managed by Central Horizon, will distribute 50 MMSCF/D, while Shell operates the Port Harcourt Cluster 1 Zone with a 30 MMSCF/D capacity.
Other zones include the Benin Local Gas Distribution Zone, managed by Nipco, and the Ogere-Ibadan-Oluyole Zone, operated by NNPC and Nipco, with capacities of 20 MMSCF/D and 150 MMSCF/D, respectively. The licences pave the way for distributing over 1.5 billion cubic feet of energy daily through a 1,200-kilometer pipeline network and more than 500 customer stations. This initiative supports the Federal Government’s last-mile energy expansion programme, which seeks to enhance Fossil Fuel supply reliability, particularly for energy-intensive industries, industrial parks, and special economic zones. The network is also designed to promote embedded captive Power Generation and mobility Compressed Natural Gas (CNG) schemes.
It impacts on national economic growth and job creation.
Furthermore, the NMDPRA emphasised that this development would create opportunities for investment, employment, and economic growth. To ensure the programme’s success, NMDPRA has committed to advocating public-private partnerships to accelerate the sector Infrastructure development. The government’s role includes regulatory oversight and the provision of financial support through a mid- and downstream energy infrastructure fund. Meanwhile, Private Sector stakeholders are expected to bring technical expertise and Investment capital to drive the projects forward. The authority has also assured stakeholders of periodic reviews of energy pricing and tariff frameworks to maintain competitive costs.
On his part, the Executive Vice President of Gas and Power at NNPC, Ogunleye Olalekan, reiterated the company’s commitment to supporting the initiative. NNPC and its partners plan to invest $500 million in establishing five LNG plants in Ajaokuta, Kogi State, to boost energy distribution and ensure adequate supply across the licensed zones. On the other hand, the programme addresses pressing issues, such as reducing exposure to carbon monoxide and expanding access to clean cooking solutions.
Related Article: NNPC, Golar LNG sign new FLNG agreement
Moreover, the initiative supports Nigeria’s socio-economic objectives by driving industrial growth, improving power availability, and enhancing competitiveness in energy-intensive industries. It also opens avenues for Innovation and technology-driven markets, creating new Revenue streams and employment opportunities nationwide. However, this sector’s growth is expected to contribute to GDP and position the country as a leader in Sustainable Energy development in Africa. NMDPRA has also noted ongoing efforts to enhance regulatory frameworks to support the sector. These include revising the Gas Transportation Network Code to improve operational efficiency, pressure stability, and metering accuracy at entry and exit points.