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The Nigerian government on Thursday launched Africa’s first gas trading licence, clearing house, and settlement authorisation platform aimed at enabling efficient, transparent, and swift trading of natural gas.
The initiative led by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in collaboration with Securities and Exchange Commission (SEC) granted licenses to JEX Markets Limited to establish and operate the online platform for gas trading and exchange.
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Speaking at the launch in Abuja on Thursday, Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), said the platform will pave the way for smooth natural gas business, transparent pricing, efficient price determination, and secure payment mechanisms hallmarks that align seamlessly with the national energy policies and global best practices.
According to him, the initiative is critical for the success of the ‘decade of gas’, noting that the trading environment and the benefits that come with it will strengthen the level of industrialisation and ensure the injection of private investments into the gas processing and transport sectors.
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“This launch is completely consistent with the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, who stated that natural gas will play the central role in the energy security, industrialisation, and economic diversification. The President’s vision requires a regulatory environment that is predictable, trusted, and designed to unlock value,” Mr Ekpo said.
The minister said the country is richly endowed with natural gas reserves, among the biggest in the world, but if the underlying market where the gas will flow is not efficient, reliable, and well-regulated, it will not be possible for it to realise the ultimate potential of the resource.
“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.”
“The licence is founded upon sound regulations and guidelines governing technical competence, commercial capability, financial soundness, and responsible operations. Among the responsibilities of the licence holders is the adherence to the various rules on gas measurement, tariffs, pricing, and assignments,” he said.
Also speaking, the NMDPRA Chief Executive, Farouk Ahmed, said Nigeria holds over 209 trillion cubic feet (TCF) of proven gas reserves, the largest in Africa and an estimated 600 TCF of potential reserves.
Despite this wealth, he said, the country’s 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.
He noted that the presentation of a Gas Trading License (GTL) and a Clearing House and settlement Authorisation to JEX Markets Limited is in compliance with the provisions of section 159 of the Petroleum Industry Act (PIA) 2021 for the trading and settlement of wholesale gas in Nigeria.
“The implementation and full operationalisation 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 said.
In his remarks, Emomotimi Agama, SEC Director General, said gas trading on a recognised platform declares that the country’s vast hydrocarbon resources, particularly gas, will no longer be just a commodity for export or domestic use, but a financially traded asset on a transparent, efficient, and regulated market platform.
This, he said, is a monumental shift from the physical to the financial, with profound implications.
“For decades, our economic narrative has been heavily tied to the crude oil price cycle. Today, we take a decisive step to change that script. By establishing a recognised gas trading platform.”
The platform, he said, will generate a credible, market-driven Nigeria gas price index, reflecting true domestic and regional demand and supply.
“This eliminates opacity, fosters fair pricing, and builds confidence among producers, transporters, and consumers,” he said.
He explained that as the apex regulator of the capital markets, its mandate is clear to protect investors, maintain fair, orderly, and transparent markets, and mitigate systemic risk.
Ikeagwuonu Ugochinyere, Chairman, House Committee on Petroleum Resources (Downstream) said the creation of an electronic gas trading and exchange platform is particularly significant to the country.
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“It introduces transparency into pricing, strengthens price discovery, secures transactions, and opens the entire market to a wider range of participants big and small, reduces the opaqueness that has hindered efficiency in the past and aligns Nigeria with international best practices.
“For years, we have spoken about gas as the cornerstone of Nigeria’s energy future. We have emphasised our vast reserves, our potential to lead the continent, and the centrality of gas to our economic diversification plans.
“What we are witnessing here today is the operationalisation of those ideas: a move from policy to practice, and from aspiration to structured implementation,” he said.
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