• NMDPRA: Transition tied to infrastructure, affordability safeguards
• Shell: Nigeria must enable local firms to unlock deepwater potential
• Seplat calls for gas-led industrialisation in Nigeria
Peter Uzoho
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said the federal government is targeting a full transition to a willing-buyer, willing-seller gas pricing regime within the next two years, ending years of delay over concerns about affordability and power costs.
Chief Executive of NMDPRA, Mr. Rabiu Umar, announced the timeline yesterday in Lagos at the opening of the 49th Nigerian International Conference and Exhibition (NAICE), organised by the Society of Petroleum Engineers (SPE) Nigeria Council.
During the event themed: “Thriving in the Evolving Global Energy Landscape: Collaborative Growth and Resilience,” Umar said the Petroleum Industry Act (PIA) already provides for the shift but implementation must be sequenced with infrastructure growth and consumer protection measures.
Current domestic gas pricing in Nigeria stands at $2.18/mcf for gas-to-power and below $2/mcf for gas-based industries (GBI).
But upstream gas producers have for a long time been calling for a non-regulated gas pricing regime anchored on willing-buyer, willing-seller basis to incentivise the sector, attract investment and boost gas production and supply to local market.
They had recently pushed for the federal government to raise gas rates to between $2.60/mcf and $5/mcf.
The operators under the aegis the Independent Petroleum Producers Group (IPPG), Oil Producers Trade Section (OPTS), Association of Local Distributors of Gas (ALDG), Nigerian Gas Association (NGA) and the Nigerian Liquefied Petroleum Gas Association (NLPGA), among others, had approached the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo to increase the price of natural gas to reflect current business realities.
The NMDPRA boss explained that the issue is now being addressed through a phased approach, stressing that the authority will maintain the current gas-based price regime in the interim while working to guarantee open access to pipelines so that pricing reform does not become a bottleneck for new investment.
He noted that the goal of government was not to have gas regulated regime forever and that the PIA was clear on the transition, with the target to be on a willing-buyer, willing-seller basis in the next one to two years.
He said: “And then on gas tariff, while we’re monitoring and consolidating on the gas-based price regime of the PIA, we’re guiding an orderly transition towards a willing buyer, willing seller framework as infrastructure expands and market access improves.
“I know this is a sore point for a lot of the gas producers. The goal of the government is not to have gas to be regulated forever. No. The PIA is very clear, black and white. There is a transition. We haven’t reached that level of maturity.
“But the idea is that in the next year or two, we should be on a willing buyer, willing seller basis. And of course, in the interim, our job is to make sure there’s open access and to make sure that that does not become a bottleneck for people who want to invest in that space. And then again, aligning with global expectation means turning environmental liabilities into economic assets.”
The downstream and midstream regulator positioned natural gas as the immediate and long-term catalyst for Nigeria’s economy.
Under the Decade of Gas framework, NMDPRA said it is moving from policy design to physical execution, with priority on getting gas to power, industry and transport.
The completion and commissioning of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline was highlighted as critical to unlocking industrial demand in the Abuja corridor.
Umar said the authority was also preparing for the next round of gas distribution licenses and has begun a market mapping exercise along the Oben-Obiafu-Obrikom (OB3) and AKK pipelines to identify demand clusters and define viable distribution zones.
To support switching at household level, he pointed out that the NMDPRA is scaling Liquefied Petroleum Gas (LPG) and CNG penetration to diversify the domestic energy mix, lower carbon footprint and free up more liquids for export.
This is in addition to efforts to ensure gas remains affordable for power generation, which remains the largest domestic off-taker.
Umar explained that the move to a market-based pricing regime will depend on expanded pipeline capacity and more players in the market. The regulator’s interim role, according to him, is to ensure third-party access so that new producers and off-takers can connect without discrimination.
He added that once infrastructure expands and market access improves, prices can be left to commercial negotiation.
He said the pricing shift is also being tied to Nigeria’s competitiveness abroad and that NMDPRA is working with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to eliminate routine gas flaring and curb methane emissions so Nigerian gas remains attractive in a carbon-constrained global market.
He said the gas pricing plan sits within NMDPRA’s broader “firm, fair and fast” agenda focused on energy security, gas expansion and regulatory excellence.
The authority said it is streamlining approvals and improving predictability for investors, with a commitment that once conditions for licenses are met, approvals will be processed like clockwork.
On energy security, Umar said the focus is on both product availability and infrastructure reliability, and that NMDPRA is collaborating with NNPC Limited under PIA provisions to rehabilitate critical pipelines, strengthen integrity management and reduce losses and disruptions.
The regulator also emphasised the need for strategic stocks and protocols for release to help stabilize prices during supply shocks.
Regionally, he said the Authority is driving alignment through the West Africa Regulators Forum (WARF) and a planned benchmark price for refined fuels with S&P Global Commodity Insights.
The objective, he explained, is to position Nigeria as a trading hub and to harmonize product specifications across West Africa to ease cross-border trade.
Umar challenged stakeholders to focus on execution rather than strategy, saying Nigeria already has the ideas and knowledge needed to grow the sector.
With gas identified as both a transition fuel and an export earner, he said the next 24 months will determine whether Nigeria can deliver the infrastructure, finalize pricing reform, and balance investor returns with domestic affordability.
Also at the event, Shell Nigeria Exploration and Production Company (SNEPCO) charged Nigeria to create an enabling environment for local companies and policy certainty to attract global capital needed to unlock the country’s deepwater opportunities.
General Manager, Development and Subsurface, Nigeria Deepwater, SNEPCo, Jiang Kun stated while delivering the sponsor’s goodwill message.
Kun said Nigeria has the ingredients to become one of the world’s most attractive energy investment destinations, with over 240 million people, abundant resources and growing domestic demand.
But she noted that potential must be converted into progress through action on capital, business environment and technology.
She said investments remain the lifeblood of energy development, with more than $500 billion invested annually across the global oil and gas industry. For Nigeria to compete, she added, sustained investment and continued policy certainty are required to 2030.
According to her, Shell is demonstrating confidence with the ongoing work on Bonga North and advancement of Bonga Southwest. Beyond major projects, Kun stressed the need to enable Nigerian companies to participate.
She cited SNEPCo’s collaboration with nine Nigerian banks on a $3 billion contract financing programme designed to improve funding access for local contractors and accelerate project delivery.
On the business environment, Kun said investors are increasingly selective and capital flows to jurisdictions offering stability, transparency and attractive fiscal terms.
She said sustaining reform momentum in the Nigerian oil and gas industry will be essential for the country to unlock its full potential.
Kun also highlighted technology as a key accelerator, noting that SNEPCo is deploying data-driven insights and dynamic maintenance to achieve world-class reliability on Bonga nearly two decades after first oil.
In his keynote speech, Chief Executive Officer of Seplat Energy Plc, Effiong Okon, called for an energy addition approach in Nigeria, stressing that development requires more reliable, affordable and cleaner energy rather than removing existing sources.
Okon said energy sufficiency underpins prosperity and that Nigeria must improve uptime, secure supply routes and deepen gas infrastructure to meet global demand during periods of supply stress.
He cited recent disruptions around the Strait of Hormuz and tight refined product markets as evidence that energy security depends on the entire value chain from reservoir to market.
Okon outlined five priorities, including competitiveness to attract investment, reliable infrastructure, gas-to-industry projects with accountable delivery, lower-cost and lower-carbon production, and practical collaboration through faster approvals and shared facilities.