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The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has set September 24, 2028 as the target date for Nigeria’s domestic gas market to fully operate under a willing-buyer, willing-seller model.
The Chief Executive of NMDPRA, Mr Rabiu Umar, disclosed this yesterday at the Gas Market Maturity Workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund (PTDF), Abuja.
Umar said the target marked a major shift towards a commercially driven gas market, where prices and contracts would increasingly be determined by buyers and sellers rather than regulation.
He said the transition would depend on measurable improvements in the market, including adequate and diverse gas supply, increased participation by buyers and sellers, access to transportation infrastructure, bankable contracts, reliable payments and credible price signals.
“Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,” he said.
According to Umar, the Petroleum Industry Act (PIA) provides for a gradual shift from a market largely coordinated through regulation to one increasingly driven by commercial contracts between willing buyers and willing sellers.
He said Section 167 of the PIA provides for the gradual withdrawal of price regulation as competition, commercial contracting and market maturity improve.
“The journey we are starting should lead us to a place where we should target a 24-month at best period within which we will be able to declare the market to be truly a willing buyer, willing seller market,” Umar said.
He, however, warned that liberalisation could not be achieved by simply announcing a date, stressing that the market must first meet clearly defined conditions and safeguards.
Umar listed gas supply and diversity, the number and quality of market participants, access to transportation infrastructure, strength of contracts, payment discipline, delivery obligations, access to market information and credible price signals as key measures of market readiness.
Despite Nigeria’s large gas reserves, he said domestic supply remained tight and warned that building infrastructure without enough gas to fill it could undermine the viability of major projects.
“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 stressed the need to ensure that major projects, including the Ajaokuta-Kaduna-Kano (AKK) gas pipeline, have enough gas supply to make them commercially useful.
He said the role of the regulator would also change as the market develops, with greater focus on setting clear rules, ensuring fair access, protecting competition and monitoring the conduct of market players.
The NMDPRA boss disclosed that the authority had started consultations on draft regulations aimed at tackling anti-competitive practices and translating the competition provisions of the PIA into enforceable rules.
He also called for a realistic assessment of the different segments of the gas market, noting that they were not all at the same stage of development.
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He said the transition would therefore have to be properly sequenced, with regulators determining which segments were ready to move first, the conditions they must meet and the safeguards required before liberalisation.
Umar further disclosed that the NMDPRA was nearing the completion of its gas distribution licensing process, with qualified companies expected to receive licences in the fourth quarter of 2026.
He said the authority was also working to increase domestic use of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG), while several LNG and gas-to-power projects were being developed across the country.
According to him, greater use of gas domestically would support electricity generation, reduce dependence on imports and help cut transmission losses associated with transporting power over long distances.
He stressed that a predictable and transparent regulatory environment was necessary to attract long-term investment into the gas industry.
“For you to take an FID in a gas investment, you need to have a long-term contract,” he said, adding that the authority was ready to engage with individual projects and identify regulatory measures that could support their development.
Also speaking, 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 set clear targets, including increasing gas supply to 12.6 billion cubic feet per day (bcf/d) by 2030.
He said 16 major infrastructure projects had been identified to support the expansion of the gas market, while more than 60 projects capable of generating about 15bcf/d in gas demand had also been identified.
He said a mature gas market would also require the development of a viable gas-to-power market and wider access to cooking gas.
The President of the Nigerian Gas Association, Mrs Yetunde Taiwo, said the transition must be guided by clear milestones to prevent Nigeria from liberalising the market either too early or too slowly.
“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,” she said.
Taiwo said Nigeria had made significant progress in the gas industry over the past decade but still had substantial work to do.
She called for stronger cooperation among government, regulators and industry, with government providing clear policy direction, regulators creating predictable rules and businesses investing in and delivering projects.
She said the ultimate goal should be a gas market capable of attracting investment, encouraging wider participation and providing reliable gas to industries, businesses and households.
The workshop examined the conditions and measurable indicators required to gradually move Nigeria towards a willing-buyer, willing-seller gas market under the Decade of Gas programme.
