The federal government has unveiled Africa’s first gas trading licence, clearing house and settlement leeway platform to ensure efficient and transparent trading of natural gas.
The government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in partnership with the Securities and Exchange Commission (SEC) granted a license to JEX Markets Limited to establish and operate the online platform for gas trading and exchange.
Minister of State for Petroleum Resources (Gas), Mr Ekperikpe Ekpo, at the launch said the platform would pave the way for easy natural gas business, transparent pricing and secure payment mechanisms hallmarks that align with the national energy policies and global best practices.
According to him, the initiative is critical for the success of the ‘decade of gas’, noting that the trading environment and the benefits that come with it will strengthen the level of industrialisation and ensure the injection of private investments into the gas processing and transport sectors.
“This launch is completely consistent with the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, who stated that natural gas will play the central role in the energy security, industrialisation, and economic diversification. The President’s vision requires a regulatory environment that is predictable, trusted, and designed to unlock value,” he said.
Mr Ekpo said the country is richly endowed with natural gas reserves, among the biggest in the world, but if the underlying market where the gas will flow is not efficient, reliable, and well-regulated, it will not be possible for us to realise the ultimate potential of the resource.
“The gas trading licence introduced today is decisive on this front, paving the way for a new, regulated market where reliable traders will feel safe doing business, where businesses can plan, and where investors can invest, knowing that it will safeguard both their capital and the public interest.
“The licence is founded upon sound regulations and guidelines governing technical competence, commercial capability, financial soundness, and responsible operations. Among the responsibilities of the licence holders is the adherence to the various rules on gas measurement, tariffs, pricing, and assignments,” he said.
On his part, NMDPRA Chief Executive, Mr Farouk Ahmed, also said Nigeria holds over 209 trillion cubic feet (TCF) of proven gas reserves, which is the largest in Africa and an estimated 600 TCF of potential reserves.
He said despite the potential, Nigeria’s domestic gas market has remained underdeveloped and constrained by pricing opacity, high transaction costs, limited flexibility, market illiquidity, poor sanctity of gas contracts, restricted access to gas and low investments in the sector.
Mr Ahmed noted that the presentation of a Gas Trading License (GTL) and a Clearing House and settlement Authorisation to JEX Markets Limited is in compliance with the provisions of section 159 of the Petroleum Industry Act (PIA) 2021 for the trading and settlement of wholesale gas in Nigeria.
The implementation and full operationalisation of this provision of the PIA will further unlock the extensive opportunity and investment potentials of the gas industry through the improved supply and utilisation of the country’s vast gas resource in our strategic economic sectors of power, Industry and transportation.”