The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued 25-year gas distribution licences to 10 companies for the establishment, construction and operation of gas distribution networks.
The licences, which cover franchise areas in Lagos, Ibadan, Port Harcourt, and Benin City, are part of the Federal Government’s current drives towards improved domestic gas utilization by ensuring distribution to homes and industries across clusters in the South West and South-South geopolitical zones of the country.
The Chief Executive Officer of the NMDPRA, Ahmed Farouk, in his keynote address on Tuesday on the licensing of the firms, listed the licensees as including the Nigerian National Petroleum Company Limited (NNPCL), Shell, NIPCO, Central Horizon Gas Company, Falcon, and Axxela.
While clarifying that the areas awarded are those already connected to the Escravos-Lagos Pipeline System, the industry expert said that out of 30 applications received, 20 were screened out, leaving the top 10 licensees to spearhead the first phase of gas utilization programme.
Farouk disclosed that among the clusters, the Agbara, Ota, and Badagry Local Gas Distribution Zone would be jointly operated by NNPCL and Shell, with a capacity of 102 million standard cubic feet per day while the Greater Lagos Industrial Area (GLIAS Local Gas Distribution Zone), with a capacity of 130 MMSCF/D, would be operated by NNPCL and Gaslink.
According to the operational template from the NMDPRA, the Ikorodu Local Gas Distribution Zone, operated by NNPC and Falcon, has a capacity of 25 MMSCF/D, and the Kara Bridge-Ibafo-Sagamu Interchange Local Gas Distribution Zone, with a capacity of 150 MMSCF/D, will be managed by NNPC and Nipco.
Similarly, the Lekki Free Trade Zone Local Gas Distribution Zone will be operated by NNPCL and NIPCO, with a capacity of 25 MMSCF/D, just as the Ogere-Ibadan-Oluyole-Olorisako-Asuire-Ajoda Local Gas Distribution Zone, managed by NNPCL and NIPCO, has a capacity of 150 MMSCF/D.
In the South-South region, the Port Harcourt Cluster 2 Local Gas Distribution Zone, operated by CHGC, has a capacity of 50 MMSCF/D, while the Port Harcourt Cluster 1 Local Gas Distribution Zone, being managed by Shell, will operate with a capacity of 30 MMSCF/D.
Also, the Ada Local Gas Distribution Zone, with a capacity of 30 MMSCF/D, will be managed by NNPCL, and the Benin Local Gas Distribution Zone will be operated by NIPCO, with a capacity of 20 MMSCF/D.
Farouk maintained that that the licences would facilitate the distribution of over 1.5 billion cubic feet of gas per day through a 1,200 km gas pipeline network and more than 500 customer stations in the country.
He clarified: “Ten licenses 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.
“A cumulative gas distribution capacity of approximately 1.5 bscf/d with over 1,200 km of gas distribution pipeline network as well as over 500 customer stations are covered by the licenses being issued today”, the expert added.
According to him, the licences offer a significant opportunity to support the development of the nation’s domestic gas market through the supply of gas to energy and testing industries, industrial parks, special economic zones, embedded captive power generation, mobility CNG schemes, and to any other downstream gas utilisation programme.
He expressed optimism that the initiative would not only support the accelerated development of Nigeria’s domestic gas market, but that it shall create opportunities for profitable investment for various classes of stakeholders, improve the socio-economic impact of gas resources nationwide, and support our national energy processing sectors.”
In addition, the NMDPRA boss projected that it “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.”