Business

FG Grants 10 Gas Distribution Licences to Companies for 25 Years

The Federal Government of Nigeria has issued 25-year gas distribution licences to various companies, covering 10 franchise areas in Lagos, Ibadan, Port Harcourt, and Benin. These licences are for the establishment, construction, and operation of gas distribution networks.

The companies awarded the licences include NNPC, Shell, Central Horizon Gas Company, Falcon, Axxela, and NIPCO. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) granted the licences after receiving over 30 applications from interested companies. The awarded areas are those already connected to the Escravos-Lagos Pipeline System (ELPS).

At the award ceremony held in Abuja, Hon. Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), highlighted that this initiative is part of the Federal Government’s “last mile” gas expansion programme. The goal is to bring gas supply closer to Nigerians across the country.

Ekpo explained that the licences grant exclusive rights to establish, construct, and operate gas distribution systems, ensuring the non-discriminatory distribution and sale of natural gas within designated local distribution zones. He emphasized that the issuance of these licences is a key step in implementing the Petroleum Industry Act (PIA) and aligning with the Gas Distribution Regulations of 2023.

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Engr. Farouk Ahmed, the Chief Executive of NMDPRA, disclosed that the licences will facilitate the distribution of over 1.5 billion cubic feet of gas per day through a 1,200km gas pipeline network and more than 500 customer stations. He added that the licences would support the development of Nigeria’s domestic gas market by supplying gas to various industries, including energy, industrial parks, special economic zones, and captive power generation schemes.

Ahmed further explained that the licence regime would create profitable investment opportunities, improve the socio-economic impact of gas resources, and support Nigeria’s energy processing sectors.

In addition, Mallam Mele Kyari, the Group CEO of NNPC, revealed that the company and its partners would invest $500 million to establish five Liquefied Natural Gas (LNG) plants in Ajaokuta, Kogi State. Kyari, represented by Ogunleye Olalekan, the Executive Vice President of Gas and Power, assured the licence holders of a steady supply of gas across the franchise zones. He encouraged stakeholders, investors, and companies to join the Federal Government’s efforts to enhance gas supply and utilization, noting that the gas sector presents a significant opportunity for growth.

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