Gas Distribution Licences: NMDPRA To Begin Bidding After October Gridding

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) will open bidding for gas distribution licences once a nationwide gridding exercise is completed, which is expected in October, Punch reports.

The chief executive of the authority, Rabiu Abdullahi Umar, disclosed this at the Gas Investment Forum 2026, themed “Positioning Nigeria as Africa’s Global Gas Powerhouse.”

Umar said the authority plans to open a digital licensing round before the end of 2026. Investors will bid for licences covering the areas mapped out in the gridding exercise, in the same way companies apply for oil mining licences in the upstream sector.

He said the exercise is part of efforts to move the gas sector from a fragmented infrastructure and access system to a fully open-access regime.

Umar stressed that Nigeria must turn its gas reserves into infrastructure that supports economic activity. According to him, reserves without infrastructure remain only potential, while gas moved through pipelines to power stations, industrial clusters, transport corridors and homes drives productivity.

He said the federal government’s Decade of Gas Initiative is pushing the authority to speed up licences and approvals for processing plants, pipelines, storage facilities, and compressed natural gas (CNG) and liquefied natural gas (LNG) projects.

Umar also welcomed discussions on floating LNG at the forum. He noted that LNG in Nigeria is no longer tied to Nigeria LNG Limited alone, as the fuel is now used domestically and other companies are developing LNG products.

On open access, he said pipeline capacity should not be limited to a few players. The NMDPRA is rebuilding the Nigerian Gas Transportation Network Code to set clear, consistent rules for putting gas into pipelines and taking it out, including rules on shrinkage factors. He added that the law entitles a project, even one needing a connection of only 20 kilometres, to link to an existing pipeline, and the authority is responsible for ensuring this.

The regulator has also signed a cooperation framework with the Federal Competition and Consumer Protection Commission (FCCPC) to tackle price fixing, market sharing, abuse of dominance, capacity hoarding and discriminatory access.

Umar said the authority will not force owners to give up capacity that is already fully used.

On investor concerns over payment, supply reliability and pricing, he said the authority is drawing up measurable conditions for a full move to a willing-buyer, willing-seller domestic gas market.

These will be assessed on supply diversity, infrastructure access, contract performance, payment discipline, reliable market data and credible pricing.

Umar cautioned that the regulator must balance investment with affordability. Overemphasis on investment could push prices beyond consumers’ reach, while very low prices could discourage investors. “Regulators are nothing but referees,” he said.