The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has granted 10 Gas Distribution Licences (GDLs) to six companies to boost gas usage and growth in the country.

The licenses were handed out during a ceremony on Tuesday in Abuja.

The GDL, part of the Petroleum Industry Act (PIA), allows companies exclusive rights to set up, build, and run a gas distribution system in a specific local Gas Distribution Zone (GDZ).

According to the News Agency of Nigeria, the six companies that received the licenses are: NNPC Gas Marketing Company, Shell Nigeria Gas Limited, NIPCO Plc, Central Horizon Gas Company, Falcon Corporation Ltd., AXXELA

Farouk Ahmed, the Chief Executive of the NMDPRA, mentioned that the selected companies were chosen from over 30 applicants based on specific criteria.

“The licenses being issued today will support the ‘last mile’ expansion, crucial in completing an efficient and interconnected gas network across the country. 

“Ten licenses are being issued today as part of Phase one of the GDL regime to operators who have invested significantly in developing gas distribution infrastructures in the designated GDZ and have met the prescribed minimum requirements,’’ he said.

The head of NMDPRA shared that the recently granted licenses encompass a total gas distribution capacity of around 1.5 bscf/d, along with over 1,200 kilometers of gas pipeline network and more than 500 customer stations.

He mentioned that the Gas Distribution License (GDL) initiative is designed to facilitate gas supplies to energy-heavy industries, industrial parks, special economic zones, captive power generation, Compressed Natural Gas (CNG) mobility projects, and various downstream gas utilization efforts. “Piped Natural Gas (PNG) offers a steady supply, is budget-friendly, safer, and removes storage issues. These benefits will not only enhance energy efficiency but are also crucial for addressing Nigeria’s increasing energy needs,” he pointed out.

He emphasized that the authority will keep an eye on tariff setting and safety standards by the companies to ensure the Gas Distribution Network operates efficiently and transparently.

He also mentioned that another round of licenses will be issued shortly, following necessary regulatory checks and compliance with the PIA and Gas Distribution Regulations 2023.

During the event, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, highlighted that the licenses for exploring gas distribution areas will enhance access to clean cooking, CNG mobility, and boost power generation.

“These licenses, granted under the Petroleum Industry Act, will create opportunities in power generation, clean cooking, CNG mobility, and energy parks,” he stated.

He added that through President Bola Tinubu’s Liquefied Petroleum Gas (LPG) penetration initiative, gas will be piped directly to homes and industrial areas nationwide.

“Gas Reticulation will replace gas cylinders as gas is delivered directly to homes and businesses,” he noted.

The Minister concluded that this progress underscores the government’s dedication to utilizing natural gas for sustainable development in Nigeria.

Gas is a cleaner option for cooking, but only around 25% of people in Nigeria actually use it. The majority, about 150 million Nigerians, depend on biomass like firewood and charcoal. The carbon monoxide released during cooking contributes significantly to air pollution, and it seriously impacts respiratory health, which is a major cause of death for women and children. 

According to Nairametrics, the President of the African Development Bank, Akinwunmi Adesina, highlighted that over 600,000 women and children in Africa lose their lives each year due to the lack of access to clean cooking methods.