The Nigerian government has awarded 10 Gas Distribution Licences (GDL) to six companies as part of efforts to enhance gas utilisation and expand access to cleaner energy. The licences grant exclusive rights to establish, construct, and operate gas distribution systems in designated local Gas Distribution Zones (GDZs).
The beneficiary companies include NNPC Gas Marketing Limited, Shell Nigeria Gas Limited, Axxela, NIPCO Plc, Central Horizon Gas Company, and Falcon Corporation Limited.
Speaking at the award ceremony in Abuja on Tuesday, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the initiative aims to provide affordable and reliable energy to drive industrial growth and increase power availability. He noted that the scheme aligns with the government’s push for cleaner and more efficient energy solutions.
“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,” Ekpo said.
He explained that the gas distribution framework is a vital component of the country’s Decade of Gas Initiative, which seeks to expand gas infrastructure to underserved areas while promoting its use across residential, commercial, and industrial sectors. He also highlighted that the initiative is expected to accelerate the adoption of Compressed Natural Gas (CNG) as an alternative fuel for transportation.
“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,” he added.
Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said that more than 30 applications were received, but only 10 were approved after a rigorous evaluation process.
“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,” Ahmed said.
The awarded licences cover a total gas distribution capacity of approximately 1.5 billion standard cubic feet per day (bscf/d) and involve over 1,200 kilometers of pipeline networks, as well as more than 500 customer stations.
Ahmed said the GDL system is expected to support industrial parks, special economic zones, embedded power generation, and mobility CNG initiatives, strengthening Nigeria’s 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,” he said.
He further stated that the initiative is designed to unlock new markets, create jobs, and boost revenue generation.
Ahmed also highlighted the benefits of Piped Natural Gas (PNG), citing its continuous supply, cost-effectiveness, safety, and elimination of storage challenges.
“These advantages will not only increase efficiency in how we use energy but will also be essential in meeting Nigeria’s growing energy demands,” he said.
To ensure the smooth implementation of the initiative, Ahmed said the NMDPRA will monitor tariff setting and safety standards to maintain efficiency and transparency. He also called for stronger collaboration between the government and private investors, noting that public-private partnerships will be crucial in expanding gas infrastructure.
“We will encourage public-private partnerships to speed up the development of gas infrastructure, with the government playing a vital role in providing support through regulatory oversight and the Midstream and Downstream Gas Infrastructure Fund, while private companies will bring in the expertise and investment needed to drive the project forward,” he said.
Ahmed added that the NMDPRA will periodically review gas pricing frameworks to ensure that gas remains affordable and competitive, in line with the provisions of the Petroleum Industry Act (PIA).
The Gas Distribution Licence initiative represents a major step in Nigeria’s energy sector, improving domestic gas supply, expanding infrastructure, and promoting the use of clean energy. The government’s efforts to work with private investors aim to create a sustainable and efficient domestic gas market, reinforcing Nigeria’s position as a key player in the global energy transition.
