NMDPRA Unveils Trading Framework To Unlock Nigeria’s Gas Potential

Nigeria reached a historic turning point in its gas sector reform agenda as the Nigerian Midstream and Downstream Petroleum Regulatory Authority, led by the Authority Chief Executive, Engr. Farouk Ahmed, formally presented the pioneer Gas Trading Licence and Clearing House and Settlement Authorization to JEX Markets Limited.

The announcement, made by Ahmed at an official ceremony in Abuja, signifies a major leap toward building a transparent, efficient, and inclusive gas marketplace that aligns with the national ambition articulated under the Decade of Gas initiative.

For decades, Nigeria has held vast natural gas resources, with 209 trillion cubic feet (TCF) of proven reserves and up to 600 TCF in potential reserves making it Africa’s largest gas holder.

However, the domestic gas market has long been constrained by structural bottlenecks such as pricing opacity, high transaction costs, poor contract sanctity, limited access, and low investment inflows.

Ahmed explained that the new gas trading framework aims to correct these weaknesses by establishing a modern platform where wholesale gas transactions are guided by transparent pricing, reliable clearing systems, and standardized trading practices.

The licence issuance is one of the key steps in operationalizing critical provisions of the Petroleum Industry Act (PIA), enacted in 2021, which transformed the legal and regulatory architecture of the midstream and downstream petroleum sector.

Under the PIA, the Authority has already implemented a number of reforms that have paved the way for a well-structured and competitive gas market.

These include establishing the Annual Domestic Gas Demand Requirement, implementing the Gas Aggregation Licence, issuing the Wholesale Gas Supply Licence, revising the Gas Transportation Network Code, and introducing a strategic gas pricing and tariff framework.

These measures were designed to enhance supply reliability, stimulate industrial growth, and catalyze investment across the gas value chain.

Farouk Ahmed emphasized that the Authority’s responsibility does not end with issuing licences.

“The true measure of today’s ceremony,” he noted, “is the transformation that tomorrow must witness.”

He reiterated the NMDPRA’s commitment to providing a firm, transparent, and technology-driven regulatory foundation that will give investors the clarity and confidence required to deploy long-term capital.

This includes working closely with the Securities and Exchange Commission, financial market institutions, and other regulators to harmonize rules, strengthen market operations, and ensure that clearing and settlement mechanisms meet global best standards.

A major focus of the Authority’s strategy is building market liquidity. To this end, Ahmed announced plans to use regulatory tools to expand participation in gas trading among producers, transporters, aggregators, and large-scale off-takers.

He stressed the need for companies to commit trading volumes, adopt standardized contracts, and uphold market integrity if Nigeria is to achieve true price discovery and establish a dynamic trading ecosystem.

Capacity building also featured prominently in the Chief Executive’s remarks.

He explained that data transparency, training, and industry sensitization would be scaled up to ensure that Nigerian businesses are fully equipped to engage confidently in the emerging gas economy.

With JEX Markets expected to serve as Nigeria’s pioneering gas trading, clearing, and settlement platform, its performance will play a crucial role in shaping regional gas integration and positioning Nigeria as Africa’s reference hub for gas pricing and commercial activity.

In congratulating JEX Markets Limited for meeting the rigorous requirements for the licence, Ahmed challenged the company to leverage its global expertise to run a world-class trading platform anchored on innovation, credibility, and operational excellence.

He also expressed appreciation to President Bola Tinubu and the Ministers of Petroleum Resources for their continued leadership and support in advancing the national gas agenda.

ENDS