Historic Launch: Nigeria's Gas Trading and Payment System Unveiled
A New Era for Nigeria’s Gas Industry
Nigeria has taken a significant step towards modernising its gas industry with the launch of its first Gas Trading Licence, alongside a new Clearing House and Settlement System. This initiative marks a pivotal moment in the country's energy sector, aiming to create a transparent, competitive, and investment-ready market. The move is expected to position Nigeria as a key player in Africa's energy landscape.
The platform was unveiled in Abuja and represents the beginning of formal, regulated gas trading in the country. Previously, the sector operated through opaque bilateral deals, but now, prices, transactions, and payments will be visible, standardised, and enforceable. This shift is anticipated to bring about greater efficiency and trust within the market.
Aligning with National Energy Goals
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, described the initiative as fully aligned with President Bola Tinubu's energy-security agenda. He highlighted that clear rules and trusted market participants would reduce risk, deepen liquidity, and attract capital into the gas value chain. According to Ekpo, the effort will pave the way for smooth natural gas business, transparent pricing, efficient price determination, and secure payment mechanisms.
Ekpo emphasized that the President's vision requires a predictable, trusted regulatory environment that unlocks value. He explained that the inauguration of the platform demonstrates this commitment. Nigeria is richly endowed with natural gas reserves, among the biggest in the world, but if the underlying market where the gas flows is not efficient, reliable, and well-regulated, it will not be possible to realise the ultimate potential of the resource.
Key Benefits of the Gas Trading Licence
The Gas Trading Licence introduced today is decisive on this front, paving the way for a new, regulated market where reliable traders will feel safe doing business, where businesses can plan, and where investors can invest, knowing that it will safeguard both their capital and the public interest.
According to Ekpo, the licence provides access, dependability, and affordability—three essential elements for a thriving gas market. The NMDPRA, which issued the licences to JEX Markets Limited, stated that the step unlocked a key provision of the Petroleum Industry Act (PIA) and laid the foundation for Nigeria's ambition to become a regional gas trading hub.
Regulatory Framework and Market Transformation
The Authority Chief Executive (ACE), Farouk Ahmed, noted that with over 209 trillion cubic feet of proven reserves, Nigeria's gas economy has long been constrained by pricing opacity, weak contract performance, and low investment. The new regime seeks to correct these issues through automated trading, transparent price discovery, and enforceable settlement.
Ahmed explained that the latest development complies with the provisions of section 159 of the PIA for the trading and settlement of wholesale gas in Nigeria. He highlighted that Nigeria's gas-focused strategic policies, initiatives, and fiscal and regulatory frameworks have continued to position the gas sector as an attractive investment environment on the African continent.
Ensuring Transparency and Efficiency
The Gas Trading Licence and other relevant regulatory instruments administered by the NMDPRA promote the sustainable development of the gas markets through the application of global best practices. These include ensuring transparency and efficiency; price discovery and reporting; safe and reliable market trading practices; automated online and real-time market trading; market liquidity and inclusive participation, as well as enhanced market access.
Ahmed stressed that the true test of licensing JEX Markets is not in the ceremony, but in the transformation it must deliver. He assured that the NMDPRA will 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.
Security and Infrastructure Development
The National Security Adviser (NSA), Nuhu Ribadu, represented by his Special Adviser on Oil and Gas, Goodluck Ebelo, stressed that the success of the new trading architecture depends on a safe operating environment. He noted that coordinated security operations have sharply reduced pipeline vandalism, illegal refining networks, and crude theft, restoring confidence to producers and midstream operators.
Ribadu highlighted that the achievement represents much more than regulatory progress, but a decisive step in the federal government's commitment to actualising the 'Decade of Gas' agenda and unlocking the full potential of Nigeria's vast natural gas resources. He stressed that a robust gas economy can only thrive within a secure and stable operating environment.
Financial Sector Involvement
The Securities and Exchange Commission (SEC), which also authorised the Clearing House, described the initiative as a major shift from the physical handling of gas to its emergence as a fully tradable financial asset. Director General, Emomotimi Agama, said the new framework will create a credible Nigeria Gas Price Index, enable market-making, de-risk infrastructure investment, and broaden Nigeria's capital market with a new asset class.
Agama urged producers, off-takers, and financiers to participate actively, arguing that a deep, transparent market will anchor industrialisation, strengthen energy security, and support long-term economic diversification. He highlighted that the theme "Gas Trading on Recognised Platform and Economic Diversification" cuts to the very heart of Nigeria's national ambition.
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