In a significant move to enhance Nigeria’s gas utilisation drive, the federal government on Tuesday awarded 10 Gas Distribution Licences (GDL) to six companies, granting them exclusive rights to establish and operate gas distribution systems in designated local Gas Distribution Zones (GDZs).
The beneficiaries of the licences include NNPC Gas Marketing Limited, Shell Nigeria Gas Limited, Axxela, NIPCO Plc, Central Horizon Gas Company, and Falcon Corporation Limited. The initiative is expected to drive industrial growth, promote clean energy adoption, and expand gas infrastructure across the country.
During the award ceremony in Abuja, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, highlighted the strategic importance of the move in Nigeria’s energy transition and economic transformation. He noted that the licences would accelerate the adoption of Compressed Natural Gas (CNG) as a cost-effective and sustainable fuel alternative, particularly in the transportation sector.
“The issuance of the Gas Distribution Licence comes at a pivotal moment as we intensify efforts to harness the potential of gas as a critical resource for Nigeria’s economic transformation,” Ekpo stated. “This step is not just about meeting regulatory requirements but about building a future where gas serves as the foundation for industrialisation, economic growth, and an improved quality of life for all Nigerians.”
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Chief Executive, Farouk Ahmed, revealed that over 30 companies had applied for the licences, but only 10 were awarded as part of Phase 1 of the licensing regime. He explained that the selected companies had demonstrated substantial investments in gas distribution infrastructure, meeting all regulatory requirements.
According to Ahmed, the licences cover a cumulative gas distribution capacity of approximately 1.5 billion standard cubic feet per day (bscf/d), with over 1,200 km of gas pipeline networks and more than 500 customer stations. The GDL regime is expected to support industries, special economic zones, embedded power generation, and the expansion of mobility CNG schemes.
He emphasised that the licences would not only improve access to Piped Natural Gas (PNG)—which is cost-effective and eliminates storage challenges—but also foster public-private partnerships to accelerate gas infrastructure development. The government, through regulatory oversight and funding mechanisms, will collaborate with private investors to ensure the project’s success.
To ensure transparency, the NMDPRA will monitor tariff structures and safety standards while periodically revising gas pricing frameworks to maintain competitive and fair costs.
Industry stakeholders have welcomed the move, with Axxela Limited celebrating the receipt of its licences for Gaslink Nigeria Limited and the Greater Lagos Industrial Area (GLIA) Local Gas Distribution Zone in partnership with NNPC Gas Marketing Limited. The company described the award as a crucial step toward expanding gas access and supporting Nigeria’s industrial growth.
With the Decade of Gas Initiative in full swing, the government remains committed to leveraging the country’s vast gas resources to drive economic development, reduce reliance on traditional fuels, and ensure a stable and sustainable energy future.
