NMDPRA grants GACN Ltd. license, as gas aggregation monopoly ends
… as NNPCL increases equity in GACN from 30% to 40%
Oredola Adeola
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has granted the Gas Aggregator Company Nigeria Ltd, the Domestic Gas Aggregation License by the provisions of the Petroleum Industry Act, 2021, to carry out its functions, operating alongside other private investors in the midstream and downstream segments.
Engr Farouk Ahmed, the Authority Chief Executive, made this announcement on Tuesday during the issuance of the domestic gas aggregation license ceremony and the “Unveiling event of GACN’s New Mandate Identity and Expanded Mandate, in Abuja.
EnergyDay’s check showed that this latest development ended the monopoly of gas aggregation previously held by the Gas Aggregation Company Nigeria Limited (GACN), which was established by the Federal Government in 2010, under the National Domestic Gas Supply and Pricing Regulations.
Meanwhile the Federal ended GACN’s monopoly of gas aggregation with a private investor operator expected to play actively in the midstream in compliance with the provision of the PIA, which introduced the midstream sector.
On the back of this development, the NMDPRA in October, 2023, granted the Ohuru Trading Limited, an indigenous company, the first Wholesale Gas Supply Licence for 500 million standard cubic feet of gas per day, as the FG aimed at attracting foreign direct investments and capital inflow into the domestic economy.
EnergyDay gathered the Federal Government granted commercial license to the firm under Section 142 of the Petroleum Industry Act (PIA), allowing it to purchase natural gas directly from any lease or third-party supply to power plants and other companies, while temporarily relying on the current gas transport infrastructure.
According to the NMDPRA boss, the license is expected to stimulate vibrancy and efficiency and spur additional investments into the natural gas value chain in the country through support for the Implementation of domestic gas delivery obligations.
Engr. Ahmed said that the license will ensure transparency in the domestic gas strategic sectors.
He said, “It will culminate in the operating nomination and balancing mechanism for equitable curtailment of natural gas deliveries in cooperation with the NMDPRA.
He further said the “Gas Aggregator Company Nigeria Ltd/Gte is being presented with the Domestic Gas Aggregation License to carry out its functions according to the conditions prescribed in the Petroleum Industry Act, 2021, the Regulations and terms & Conditions made therefrom.
Ahmed said the Authority, as a business enabler, is pleased with the attainment of this milestone. “We believe it will reinforce the commitment and the renewed-hope efforts of this Administration towards the development of gas resources for the betterment of the lots of the investors and Nigerians in general,” he said.
The NMDPRA also explained that Section 153 of the Petroleum Industry Act (PIA 2021) provides that the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a domestic gas aggregation license.
In line with the above, the Gas Aggregator Company of Nigeria (limited by guarantee) application for a Domestic Gas Aggregation license was approved after due consideration and upon fulfillment of the specific requirements.
The Domestic Gas Aggregation license as provided for in the PIA is significant in many respects as it underscores the focus and priority attention placed on the domestic gas market space.
Hon. Eberikpo Ekpo, Minister of State for Petroleum (Gas), in his goodwill message, said that the expanded mandate of the GACN is not just for GACN but for the entire gas sector.
According to him, “The rebranding and expansion of GACN’s mandate symbolises a tripod towards actualizing the Federal Government of Nigeria’s ambition to make sure there is gas penetration nationwide with already existing and laid down policies to create a thriving domestic gas sector that will build national development.”
The Minister of State for Petroleum (Gas) further emphasised that GACN has consciously grown its volume from simple facilitation of gas supply agreements to nurturing the growth of the gas domestic market. This role, according to him, has been pivotal in shaping Nigeria’s gas sector.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) has on the sideline of the issuance of the licence increased its equity in the GACN from 30 per cent to 40 percent.
Mele Kyari, NNPCL Group Chief Executive Officer, made this known in his remark at the ceremony, stated that the NNPC recognised its role and involvement from upstream to the fuel stations or wherever gas ends or to homes.
“We know the critical role we have to play and that is why we took increased interest in GACN by also elevating our presence in the company by scaling from 30 to 40per cent and also giving one of the best of hands that we can get for you.
“Gas can be delivered to the domestic market to create the spike and revolution Nigerians envisage,” Kyari said.
The NNPCL GCEO further noted that the NNPC is now set for business given the recognition of the fact that Nigeria is a gas country with associated oil and that only little has been done about the gas.
He promised that the company could create the infrastructure needed to deliver gas to the domestic market.
Kyari stated that the NNPCL can now issue an invoice to Niger Delta Power Holding Company Managing Director, for the company to pay its bills. According to him, “That can only happen if there is appropriate pricing for gas.”
The NNPCL GCEO therefore used the occasion to confirm the full engagement of Mr. Chijioke Uzoha, of the national oil company.
