FG PUTS A STOP TO MONOPOLY OF GAS AGGREGATION WITH NEW LICENCE

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The Federal Government has relinquished its monopoly on gas aggregation, and moving forward, a private investor operator is anticipated to play a significant role in the midstream.

Up until now, the private sector participants have worked in the sector’s upstream and downstream regions. However, the creation of the midstream sector by the Petroleum Industry Act (PIA) liberated the industry.

The Gas Aggregation Company Nigeria Limited (GACN), which was founded by the Federal Government in 2010 as a result of the National Domestic Gas Supply and Pricing Regulations, previously controlled the stream.

The Nigeria Midstream Downstream Regulatory Authority has granted Ohuru Trading Limited, a local business, the first wholesale gas supply licence for 500 million standard cubic feet of gas per day in response to the new development.

Farouk Ahmed, the chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, said the development was a result of the government’s commitment to luring foreign direct investments and other types of capital inflow into the national economy as well as enhancing the quality of life for Nigerians.

The corporation, which focuses mostly on providing gas to power plants, may temporarily depend on the nation’s existing gas transport infrastructure to invest in such initiatives.
While presenting the licence in Abuja, Ahmed stated that the action would improve the country’s use of gasoline and satisfy Section 142 of the PIA.

Ahmed said: “The commercial licenses as provided for in the PIA in general and the Wholesale Gas Supply Licence in particular are significant in many respects as they underscore the focus and priority attention placed on commercial activities in the oil and gas space.”

According to him, the company’s application for the Wholesale Gas Supply Licence was approved after due consideration and upon fulfillment of the stipulated requirements, adding that the firm was being presented with a third-party gas supply licence to purchase natural gas directly from any lease or third party.

He added that the commercial licences as provided for in the PIA in general and the Wholesale Gas Supply Licence, in particular, are significant in many respects as they underscore the focus on commercial activities in the oil and gas space.

“This will enable them to sell and deliver wholesale gas to wholesale customers and natural gas distributors at any location in Nigeria. We believe that this will encourage prospective applicants to turn in their requests for other commercial licences introduced by the Act and domiciled with the authority,” he said.

The Chief Commercial Officer of Ohuru Trading Limited, Mariah Lucciano-Gabriel, lauded the development, saying the company’s supply has primarily been in the area of gas to power.

She noted that the company, while relying on existing infrastructure, would, at some point, build its network to improve reliability.