NMDPRA to Launch Gas Distribution Licensing Round

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) plans to open a digital licensing round for gas distribution areas across Nigeria before the end of 2026.

Chief Executive Rabiu Umar disclosed in his opening remarks at the Gas Investment Forum 2026, themed "Positioning Nigeria as Africa's Global Gas Powerhouse."

Umar said the round will follow the completion of a nationwide gas distribution gridding exercise expected in October, under which investors will bid for licences covering mapped-out areas, similar to how companies currently bid for oil mining licences in the upstream sector.

"Under the licensing round, applicants will bid for gas distribution licences in the gridded areas available across the country, in the same way licensees apply for oil mining licences in the upstream sector," he said, describing the exercise as part of a push to move Nigeria's gas sector away from fragmented infrastructure toward a genuinely open-access system.

A licence dispute shows what's at stake

The stakes behind that open-access push were underscored this year by a real-world dispute in Ibadan, where a $100 million gas pipeline project stalled after NIPCO Gas, which holds a Gas Distribution Licence for the area awarded by the NMDPRA, accused Shell Nigeria Gas of attempting to operate within the same licensed territory, despite having no existing distribution infrastructure there.

NIPCO argued the move violated exclusivity provisions under the Petroleum Industry Act, while the NMDPRA confirmed a dispute existed between the companies.

Industry observers said the standoff risked undermining investor confidence just as the government pushes the Decade of Gas Initiative, illustrating how unclear licensing boundaries can stall the very infrastructure projects Nigeria is counting on to expand domestic gas use.

Umar added that reserves alone mean little without the infrastructure to move gas from the ground to the people and industries that need it.

"Without infrastructure, reserves are potential. They will continue to have potential. With infrastructure, gas becomes productivity and national resilience, especially in the light of the global headwinds that we see," he said.

He added that gas infrastructure must connect wellheads to processing plants, pipelines, power stations, industrial clusters, transport corridors, homes and export terminals.

He described the Decade of Gas Initiative as "an engine of execution" and said the NMDPRA is accelerating licences and approvals for processing plants, pipelines, storage facilities, compressed natural gas (CNG) and liquefied natural gas (LNG) projects.

LNG market has outgrown its single-company past

Umar noted that Nigeria's LNG landscape has changed significantly in recent years.

"A few years ago, when we say LNG, everybody in Nigeria thought LNG meant NLNG, because that was the only company doing LNG. Today, the case is different" he said.

He pointed to new domestic LNG use and growing interest from other companies developing LNG products, interest that has recently included companies such as NIPCO announcing plans for floating LNG projects of their own.

On open access, Umar stated that pipeline capacity should not be restricted to a handful of players, and that access to pipelines should be "not just about having pipelines, but about who can use them."

He said the NMDPRA is rebuilding the Nigerian Gas Transportation Network Code to set clear, consistently applied rules for injecting gas into pipelines and withdrawing it, including rules on shrinkage, the gas lost during transport and processing.

He said the law entitles a company with even a modest 20-kilometre connection project to access an existing pipeline, with the NMDPRA responsible for ensuring that access, though he added that a pipeline already operating at full capacity "cannot be compelled to hand space to another party."

New rules target anti-competitive practices

Umar disclosed that the NMDPRA has signed a cooperation framework with the Federal Competition and Consumer Protection Commission to address anti-competitive practices in the gas sector, covering price fixing, market sharing, abuse of dominance, capacity hoarding and discriminatory access.

The framework follows separate draft regulations the authority unveiled in September, the Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026, aimed at the broader petroleum sector, where concerns about market concentration have intensified following the emergence of the Dangote Refinery as a dominant domestic supplier and repeated disputes between Dangote, the NMDPRA and the Nigerian National Petroleum Company over crude supply and import licensing rules.

Umar said investors are particularly concerned about payment reliability, supply security and pricing.

"Markets run on trust, and trust runs on discipline," he said, identifying credible contracts, transparent tariffs, accurate measurement and enforceable rules as the foundations needed to sustain investment.

He said the authority is developing measurable conditions for a full transition to a willing-buyer, willing-seller domestic gas market, based on supply diversity, infrastructure access, contract performance, payment discipline, reliable market data and credible pricing, while cautioning that regulators must balance encouraging investment against keeping gas affordable for consumers.

"Regulators are nothing but referees," he said.