Government ends monopoly of gas aggregation with new licence
The Federal has ended its monopoly of gas aggregation with a private investor operator expected to play actively in the midstream going forward.
The private sector players hitherto operated in upstream and downstream of the sector. But the Petroleum Industry Act (PIA) unlocked the sector with the introduction of the midstream sector.
The stream was previously dominated by the Gas Aggregation Company Nigeria Limited (GACN), which was established by the Federal Government in 2010, further to the National Domestic Gas Supply and Pricing Regulations.
Following the new move, the Nigeria Midstream Downstream Regulatory Authority has offered the first Wholesale Gas Supply Licence for 500 million standard cubic feet of gas per day to Ohuru Trading Limited, an indigenous company.
Chief Executive OF Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, disclosed that the development followed the government’s commitment to attracting foreign direct investments and other forms of capital inflow into the domestic economy as well as improving the living conditions of Nigerians.
The company, primarily focusing on gas supply to power plants, may temporarily rely on the current gas transport infrastructure in the country to invest in such projects.
Ahmed, while offering the licence in Abuja said the move which would improve gas utilisation across the country is the fulfillment of Section 142 of the PIA.
Ahmed said: “The commercial licenses as provided for in the PIA in general and the Wholesale Gas Supply Licence in particular are significant in many respects as they underscore the focus and priority attention placed on commercial activities in the oil and gas space.”
According to him, the company’s application for the Wholesale Gas Supply Licence was approved after due consideration and upon fulfillment of the stipulated requirements, adding that the firm was being presented with a third-party gas supply licence to purchase natural gas directly from any lease or third party.
He added that the commercial licences as provided for in the PIA in general and the Wholesale Gas Supply Licence, in particular, are significant in many respects as they underscore the focus on commercial activities in the oil and gas space.
“This will enable them to sell and deliver wholesale gas to wholesale customers and natural gas distributors at any location in Nigeria. We believe that this will encourage prospective applicants to turn in their requests for other commercial licences introduced by the Act and domiciled with the authority,” he said.
The Chief Commercial Officer of Ohuru Trading Limited, Mariah Lucciano-Gabriel, lauded the development, saying the company’s supply has primarily been in the area of gas to power.
She noted that the company, while relying on existing infrastructure, would, at some point, build its network to improve reliability.
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