The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) expects to generate roughly N1.8 billion in revenue from the issue of Gas Distribution Licenses (GDLs). Beyond enhancing government coffers, this measure intends to transform the country’s energy landscape by increasing gas penetration for enterprises and promoting socioeconomic progress.
“This strategic initiative will not only stimulate economic activity and create numerous employment opportunities but also significantly expand opportunities at the retail end of the gas value chain,” emphasized George Ene-Ita, Director of the Public Affairs Department at NMDPRA. He further highlighted the pivotal role of GDLs in propelling the Compressed Natural Gas (CNG) scheme, enhancing accessibility and distribution across the country. “In the medium to long term,” Ene-Ita stated, “the award of these licenses will generate substantial revenue, exceeding N1.8 billion, for the government.”
Currently, Nigeria boasts an impressive gas distribution infrastructure, encompassing approximately 1.5 billion Standard Cubic Feet per day (SCF/d) of installed capacity and an extensive 1281.978 kilometres of pipeline systems. This robust network serves over 600 customers nationwide.
GDLs are granted an exclusive right of 25 years, ensuring a stable and predictable environment for investors. Key requirements for obtaining a GDL include secure connectivity with an existing or planned natural gas transmission pipeline system to ensure a reliable wholesale gas supply.
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The impact of these licenses extends beyond revenue generation. By expanding access to clean and affordable energy, GDLs will empower businesses, stimulate industrial growth, and improve the quality of life for Nigerians. This initiative aligns perfectly with the government’s broader energy policy objectives to diversify the energy mix, reduce reliance on fossil fuels, and promote sustainable economic development.
While the initial focus will be on states like Sokoto, Kano, Kaduna, Abuja, Osun, Enugu, and Bayelsa, classified as underdeveloped in terms of gas distribution, the long-term vision encompasses a nationwide rollout. States like Anambra are currently in the proposed stage, while others, including Oyo, Kogi, Ogun, Edo, Ondo, Rivers, Abia, and Lagos, already boast fully operational gas distribution systems.
This strategic move by the NMDPRA signifies a significant step towards realizing Nigeria’s full energy potential. By fostering a competitive and dynamic gas market, the country can unlock new avenues for economic growth, improve energy security, and enhance the overall well-being of its citizens.
