By Bassey Udo
The Nigerian Midstream and Downstream Petroleum Regulatory Commission (NMDPRA) has issued a Gas Trading License (GTL) and a Clearing House and settlement Authorization to Jex Markets Limited.
The downstream petroleum industry regulator said the license is in compliance with the provisions of Section 159 of the Petroleum Industry Act (PIA) for the trading and settlement of Wholesale gas in Nigeria.
The Authority Chief Executive of the NMDPRA, Farouk Ahmed, said at the license presentation ceremony in Abuja that the issuance of the license was part of the effort to the implementation and full operationalization of PIA regulation to unlock the extensive opportunity and investment potentials of the country’s gas Industry through the improved supply and utilisation of the country’s vast gas resource in strategic
economic sectors of power, Industry and transportation.
Farouk said that although Nigeria holds over 209 trillion cubic feet (TCF) of proven gas reserves, reputed to be
the largest in Africa, along with an estimated 600 TCF of potential reserves, the country’s domestic gas market has remained underdeveloped and constrained.
He identified the constraining factors to include pricing opacity, high
transaction costs, limited flexibility, market illiquidity, poor sanctity of gas contracts, restricted access to gas and low investments in the sector.
These constraints, he said, informed the country’s gas-focused strategic policies, initiatives and fiscal and regulatory frameworks, such as the Decade of Gas (DoGas) Initiative, Presidential Compressed Natural Gas (CNG) initiative (PiCNG), Nigerian Gas flare Commercialization Programme (NGFCP) and Presidential executive orders on investment promotion and incentives to position Nigeria’s gas sector as an attractive investment environment on the African Continent.
The Gas Trading Licence and other relevant regulatory instruments
administered by the NMDPRA, he pointed out, have continued to promote the sustainable development of the gas markets through the application of global best practices.
These practices include the promotion of transparency and efficiency; price discovery and reporting; safe and reliable market trading practices; automated online and real-time market trading; market liquidity and inclusive participation, as well as enhanced market access.
Since the signing into law of the PIA in 2021, he said the NMDPRA has implemented its key provisions for the effective operations of the midstream and downstream gas sector, leading to the continuous transformation of the sector into a critical driver of the Nigerian economy.
He identified some of these provisions that have been fully implemented for the sector to include the establishment of the annual Domestic Gas Demand Requirement; implementation of the Gas Aggregation Licence; issuance of the wholesale gas supply license and revision and operationalization of the Gas Transportation Network Code.
Other provisions include emplacement of the strategic sector gas pricing and
transportation tariff framework; determination of the annual Domestic Base Price and the pricing framework for the gas-based industries (GBIs) and gas trading companies (GTC); concessionary price for Mobility CNG to incentivize Gas for transportation; determination of the Gas Transportation tariff; the issuance and operationalization of the Gas Distribution Licence, and the promotion of midstream/downstream gas infrastructure fund (MDGIF) objectives for the provision of gas infrastructure.
The NMDPRA, which is also hosting the secretariat of the Decade of Gas
programme, he said, is partnering to unlock the country’s significant gas resource base for domestic consumption and export.
He said the presentation of the market enabling licence was a culmination
of an effective collaboration with the Industry and reaffirms the commitment of the NMDPRA to the actualization of one of the core objectives of the PIA, which is to grow the domestic gas sector into a dynamic and competitive trading and supply hub.
As the regulator of Nigeria’s midstream and downstream petroleum sector, Ahmed said the NMDPRA recognized that the true test of license to JEX Markets was not in the presentation, but in its application to deliver value.
To ensure that JEX succeeds as Nigeria’s pioneering gas trading, clearing and settlement platform, the ACE said the company would be provided with a firm, transparent and technology‑enabled regulatory framework under the PIA, giving investors the certainty and
confidence required to commit long‑term capital to the gas value chain.
He gave the assurance that the Authority would continue to work closely with it sister regulators, including the Securities and Exchange Commission (SEC) and key financial‑market institutions, to harmonize market rules, standardize transaction contracts, and ensure that clearing and settlement arrangements met the highest global standards.
“We will actively deploy our licensing and regulatory instruments to drive participation in gas trading by producers, transporters, aggregators and large‑scale buyers, ensuring that liquidity is built and that transparent price discovery becomes the foundation of Nigeria’s domestic gas market,” he said.
Besides, he said the Authority was committed to sustained capacity building, data transparency and industry education, to empower Nigerian companies to compete effectively and confidently in the new gas economy.
The Authority, he added, would position JEX as a strategic national platform within the ‘Decade of Gas agenda’ to enable regional integration and
cross border trade, while firmly establishing Nigeria not only as a leading gas producer, but also as Africa’s reference market for gas trading and pricing.
He called on industry operators, off-takers, industrialists and financiers to
rise to take advantage of opportunity commit more volumes to the gas trading exchange, adopting standardized contracts, and upholding market rules that sustain confidence and integrity.
