Government Issues Additional Licences To Break The Monopoly On Gas Aggregation

Government Issues Additional Licences To Break The Monopoly On Gas Aggregation

The federal government has ended its monopoly on gas aggregation, and moving forward, a private investor operator is anticipated to participate actively in the midstream.

Until now, the private sector’s participants have worked both upstream and downstream in the industry. However, the creation of the midstream sector by the Petroleum Industry Act (PIA) opened up the sector.

NLPGA Auto-Gas

The National Domestic Gas Supply and Pricing Regulations led to the establishment of the Gas Aggregation Company Nigeria Limited (GACN) by the Federal Government in 2010, which at the time controlled the stream.

The Nigeria Midstream Downstream Regulatory Authority has extended the first Wholesale Gas Supply Licence, allowing Ohuru Trading Limited, an indigenous company, to supply 500 million standard cubic feet of gas per day, in response to the recent action.

Farouk Ahmed, the chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, revealed that the move was made in response to the government’s pledge to raise domestic economic growth and improve Nigerians’ quality of life by luring foreign direct investments and other forms of capital inflow.

The corporation, which focuses mostly on gas supply to power plants, might make short-term investments in these projects based on the nation’s current gas transport infrastructure.

Ahmed stated that the PIA’s Section 142 is being fulfilled by granting the licence in Abuja, a move that will enhance gas consumption nationwide.

Ahmed stated 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 and priority attention placed on commercial activities in the oil and gas space.”

He added that the business was being given a third-party gas supply licence to buy natural gas directly from any lease or third party. He claimed that the company’s application for the wholesale gas supply licence was accepted after careful review and upon completion of the required criteria.

He continued by saying that the Wholesale Gas Supply Licence in particular and the commercial licenses as outlined in the PIA in general are important because they highlight the emphasis on business operations in the oil and gas sector.

“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.

Mariah Lucciano-Gabriel, the Chief Commercial Officer of Ohuru Trading Limited, praised the development and stated that the company’s supply has mainly been in the gas to power sector.

She mentioned that even though the business was using the current infrastructure, it will eventually expand its network to increase dependability.

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