• As Nigeria awards 712MMSCF/D licences
Delay in the completion of the 614 kilometres Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline as well as the 48-inch, 127-kilometre, Obiafu-Obrikom-Oben (OB3) gas pipeline have restricted the expansion of domestic gas utilisation in Nigeria. This is as government, yesterday, in Abuja issued 10 licences for gas distribution.
Currently, Nigeria can distribute about 1.5 billion standard cubic feet of gas per day, but offers only about 712 million standard cubic feet (MMSCF) per day to be distributed in cluster, mainly within the south western part of the country.
If AKK and OB3 were in place, sources at the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) said about 5BSCF of gas would have been available to complement Nigeria’s push for domestic gas utilisation, which is a much trumpeted initiative of President Bola Tinubu after removing subsidies on Premium Motor Spirit (PMS).
While the $2.8 billion AKK project has witnessed series of delay, including funding crisis, the Nigerian National Petroleum Company Limited (NNPC) said the project would be launched in the first quarter of this year.
The Guardian, while monitoring the project along the Lokoja-Abuja axis, noticed that some of the pipelines were still laid down along the road with significant work left undone for a project expected to be in use in the next 60 days.
The project, which represents Phase One of the 1,300km-long Trans-Nigerian Gas Pipeline (TNGP) project as part of Nigeria’s Gas Master Plan, started in 2020 and was meant to be completed in 2023.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, had said the OB3 gas pipeline would be completed in March 2024, but the project remained elusive a year after his promise.
As the projects dragged, NMDPRA offered 10 licences that covered apart of Abia, Rivers and the largest licences covering Lagos, Ogun and Oyo states.
NNPC Limited, Shell and Nipco led the awards, which aimed to establish a regulated framework for gas distribution. From 30 applications received, 10 successful candidates emerged to lead the first phase of the initiative, aimed at advancing Nigeria’s gas expansion strategy.
The Agrara, Ota and Badagry Local Gas Distribution Zone (LDZ) will be operated jointly by NNPC and Shell, with a capacity of 102 million standard cubic feet per day (MMSCF/D). In the Greater Lagos Industrial Area (GLIAS Local Gas Distribution Zone), NNPC and Gaslink will manage gas distribution with a capacity of 130 MMSCF/D.
Speaking at an award ceremony in Abuja, NMDPRA Executive Chairman, Ahmed Farouk, noted that the licences align with the country’s gas master plan.
Farouk stated that the licences were being issued as part of phase one of the Gas Distribution Licensing regime and will cover a network of over 1,200 kilometres of gas pipelines and more than 500 customer stations.
Chairman of the House Committee on Petroleum Resources (Downstream), Ugochinyere Ikeagwuonu, said the licensing process was a significant step towards unlocking Nigeria’s vast gas potential. He praised the NMDPRA for its proactive regulatory approach, which fosters transparency, private-sector investment, and adherence to global best practices.
