The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has officially presented a Gas Trading License (GTL) and a Clearing House and settlement Authorization to Jex Markets Limited.
The licence allows JEX Markets to establish and operate a Gas Clearing House and Settlement Authorisation Platform in the country.
Speaking on Thursday at the Gas Trading Licence and Clearing House Authorisation Presentation Ceremony to Jex Markets Limited in Abuja, the Authority Chief Executive of the NMDPRA, Engr. Farouk Ahmed, advised the company to ensure that it is adequately guided by the applicable terms and conditions of the licence.
He also charged the company to leverage its global expertise and partnership to bring on board the innovation and credibility needed to administer the platform as a world-class exchange.
Engr. Ahmed noted that the presentation of the licence to Jex Markets was in compliance with the provisions of section 159 of the Petroleum Industry Act (PIA) for the trading and settlement of Wholesale gas in Nigeria.
“The implementation and full operationalization of this provision of the PIA will further unlock the extensive opportunity and investment potentials of the gas Industry through the improved supply and utilisation of the country’s vast gas resource in our strategic economic sectors of power, Industry and transportation,” he added.
The NMDPRA boss stated that Nigeria holds over 209 trillion cubic feet (TCF) of proven gas reserves, the largest in Africa and an estimated 600 TCF of potential reserves. Yet, its domestic gas market has remained underdeveloped and constrained by pricing opacity, high transaction costs, limited flexibility, market illiquidity, poor sanctity of gas contracts, restricted access to gas and low investments in the sector.
Nevertheless, he said that the government’s gas focused strategic policies, initiatives and fiscal and regulatory frameworks such as the Decade of Gas (DoGas) Initiative, Presidential CNG initiative (PiCNG), Nigerian Gas flare Commercialization Program (NGFCP) and executive orders of President Bola Tinubu, on investment promotion and incentives have continued to position Nigeria’s gas sector as an attractive investment environment on the African Continent.
He submitted that the Gas Trading Licence and other relevant regulatory instruments administered by the NMDPRA have continued to promote the sustainable development of the gas markets in the country through the application of global best practices.
Engr. Ahmed maintained that since the signing into law of the PIA in August 2021, the Authority has dutifully implemented key provisions of the Act defined for the operations of midstream and downstream gas sector leading to the continuous transformation of the sector into a critical driver of the Nigerian economy.
According to him, some of the key provisions of the Act that have been fully implemented for the sector include: a. Establishment of the annual Domestic Gas Demand Requirement b. Implementation of the Gas Aggregation Licence c. Issuance of the wholesale gas supply Licence d. Revision and operationalization of the Gas Transportation Network Code e. Emplacement of the strategic Sector gas pricing and transportation tariff framework.
He also mentioned that the Authority is also hosting the secretariat of the Decade of Gas program and partnering with the program to unlock the significant gas resource base of Nigeria for domestic consumption and export.
Authority said “as the regulator of Nigeria’s midstream and downstream petroleum sector, the Authority recognizes that the true test of licensing JEX Markets is not in the ceremony of today, but in the transformation it must deliver tomorrow.”
He said to ensure that JEX succeeds as Nigeria’s pioneering gas trading, clearing and settlement platform, NMDPRA would provide a firm, transparent and technology enabled regulatory framework under the PIA, giving investors the certainty and confidence required to commit long term capital to the gas value chain.
“We will continue to work closely with our sister regulators, including the Securities and Exchange Commission (SEC) and key financial market institutions, harmonize market rules, standardize transaction contracts, and ensure that clearing and settlement arrangements meet the highest global standards.
“We will actively deploy our licensing and regulatory instruments to drive participation in gas trading by producers, transporters, aggregators and large scale buyers, ensuring that liquidity is built and that transparent price discovery becomes the foundation of Nigeria’s domestic gas market.
“In addition, we are committed to sustained capacity building, data transparency and industry education, so that Nigerian companies are empowered to compete effectively and confidently in this new gas economy.
“Above all, we will position JEX as a strategic national platform within our Decade of Gas agenda to enable regional integration and cross border trade and firmly establish Nigeria not only as a leading gas producer, but as Africa’s reference market for gas trading and pricing,” he added.
As the sector enters into a new license regime, he called on industry operators, off-takers, industrialists and financiers to rise to this opportunity with discipline and collaboration — by committing volumes to the gas trading exchange, adopting standardized contracts, and upholding market rules that sustain confidence and integrity.
“JEX will only achieve the objectives of this licence through shared ownership by the entire industry, working in partnership with the regulators to deliver transparency, investment, and lasting economic value to the Nigerian people,” he concluded.
