Authority targets fully liberalised market as Nigeria pushes to deepen domestic gas consumption and attract investment…..
Nigeria’s domestic gas market could be operating under a fully commercial pricing system by September 2028, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority setting a target for the transition from regulated prices to a willing-buyer, willing-seller model.
The NMDPRA Chief Executive, Rabiu Umar, disclosed this on Thursday at the Gas Market Maturity Workshop held at the Petroleum Technology Development Fund in Abuja under the Decade of Gas initiative.
Umar said the proposed transition would not happen through a blanket removal of regulation but would depend on specific conditions showing that individual segments of the gas market were sufficiently developed to operate commercially.
He said the approach was consistent with the Petroleum Industry Act, which provides for the gradual movement from a heavily regulated market towards one increasingly driven by commercial agreements between buyers and sellers.
“Gas must be affordable for Nigerians while supporting President Ahmed Tinubu’s investment reforms. This transition is in line with the Nigeria decade of gas goal to become a gas-powered economy by 2030,” he stated.
According to the NMDPRA boss, the authority is working with a 24-month window to put the necessary conditions in place for the market to reach the point where it can be formally declared a functioning willing-buyer, willing-seller market.
“Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,” Umar said.
He added that the process would be measured against defined benchmarks rather than broad declarations of market readiness.
Among the factors identified by the regulator are the availability and diversity of gas supplies, the number and quality of market participants, access to transportation infrastructure and the strength of contractual arrangements between buyers and sellers.
Payment performance, delivery obligations, access to reliable market information and the emergence of credible price signals will also form part of the assessment.
However, Umar acknowledged that supply constraints remain one of the major challenges confronting the domestic gas industry, despite Nigeria’s substantial gas reserves.
He said the development of pipelines and other infrastructure would have limited value if there was not enough gas available to operate them at commercially viable levels.
“If you look at supply, for example, on the domestic side, it is still tight, no matter how you look at it. We have a lot of work to do in our infrastructure space,” he said.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” he added.
Umar specifically pointed to the Ajaokuta-Kaduna-Kano pipeline, stressing that projects of such scale must have adequate gas supplies if they are to deliver their intended economic benefits.
As the market evolves, he said the role of the regulator would also change, with greater attention shifting towards establishing clear market rules, guaranteeing fair access to infrastructure, safeguarding competition and monitoring the conduct of market participants.
The NMDPRA chief executive also disclosed that the authority had begun consultations on proposed regulations dealing with anti-competitive practices.
The regulations, he said, are intended to translate the competition-related provisions of the Petroleum Industry Act into enforceable rules for the gas market.
Umar said the liberalisation process would also have to recognise that Nigeria’s gas market is made up of segments operating at different levels of development.
He explained that regulators would therefore have to determine which segments were ready to transition first, the conditions they must satisfy and the safeguards that would be required before regulated pricing is removed.
Meanwhile, the NMDPRA is approaching the completion of its gas distribution licensing process, with qualified companies expected to receive licences in the fourth quarter of 2026.
Umar said expanding domestic gas utilisation would remain another major priority, particularly through greater use of liquefied petroleum gas and liquefied natural gas.
He said the government was also working to expand compressed natural gas adoption, while a number of LNG and gas-to-power projects were under development across the country.
According to him, increasing domestic consumption of gas could help strengthen electricity generation, reduce reliance on imported energy products and limit transmission losses associated with transporting electricity over long distances.
The regulator also reiterated its commitment to creating a predictable and transparent regulatory environment capable of attracting long-term capital into the gas industry.
Umar noted that gas projects require substantial upfront investment and dependable long-term agreements before investors and financiers can commit funds.
“For you to take an FID in a gas investment, you need to have a long-term contract,” he said.
He added that the authority was prepared to engage directly with project developers to identify regulatory interventions that could help remove obstacles and support viable investments.
Nigeria targets bigger gas market by 2030
Also speaking at the workshop, the Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said Nigeria could achieve a willing-buyer, willing-seller gas market before the end of the first phase of the Decade of Gas programme in 2030.
Ubong said the programme had established specific targets to support the development of a mature gas market, including increasing domestic gas supply to 12.6 billion cubic feet per day by 2030.
He disclosed that 16 major infrastructure projects had been identified as critical to expanding the country’s gas network.
On the demand side, Ubong said more than 60 projects had been identified, with the potential to generate about 15 billion cubic feet per day in additional gas demand.
He said the development of a functioning gas-to-power market and wider access to cooking gas would also be critical to achieving a mature domestic gas industry.
For the Nigerian Gas Association, the transition must be guided by measurable milestones and carefully sequenced to prevent disruptions to the market.
The association’s President, Yetunde Taiwo, said the industry had consistently supported a commercially driven gas market but stressed that the timing and pace of liberalisation would be crucial.
“As NGA, what we would like to see really is to see those goalposts, those milestones that have been set, that makes it a realistic journey for us to say we have achieved a willing buyer, willing seller status.”
Taiwo said the Nigerian gas industry had recorded considerable progress over the past decade but still faced significant challenges requiring sustained collaboration between the government, regulators and private-sector operators.
She said government should provide clear policy direction, regulators should maintain predictable rules, while industry players must continue to invest, innovate and execute projects.
According to her, the broader objective should be the creation of a gas market capable of attracting long-term investment, expanding participation and ensuring dependable gas supplies for industries, businesses and households.
