FG unveils pioneer gas trading licence, clearing authorisation

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Thursday presented Nigeria’s first Gas Trading Licence and Clearing House and Settlement Authorisation to JEX Markets Limited, in line with the Petroleum Industry Act (PIA).

The official presentation was done in Abuja by Dr Ekperikpe Ekpo, Minister of State Petroleum Resources (Gas), Authority Chief Executive, Mr Farouk Ahmed, Oscar Onyema, Chairman, JEX Markets, lawmakers and other dignitaries.

The News Agency of Nigeria (NAN) reports that with the development, JEX Markets has been licenced to establish and operate a gas trading exchange platform, including clearing and settlement functions, for natural gas and its derivatives in Nigeria.

The platform, which will act as a commodity exchange, enabling transparent and standardised gas resources trading, is the first of its kind in Africa, positioning Nigeria as a potential regional hub for gas pricing and energy market activity.

The licencing process included collaboration with the Securities and Exchange Commission (SEC), which also approved JEX as a licensed commodity exchange.

Ekpo, in his keynote address, said the licence would provide immediate benefits, including improved market access for credible traders across power, industrial, commercial and large-scale sectors.

He said the license which aligned with President Bola Tinubu’s Renewed Hope Agenda on energy security and economic diversification would provide governance framework and enable a trusted environment where investors and traders operate confidently.

Ekpo, while commending the NMDPRA and JEX Markets Limited for developing the first online gas trading and settlement platform, said it marked a new era for transparent, competitive and investment-ready gas markets in Nigeria.

“The Nigeria’s vast gas reserves would only deliver value if managed within an efficient and well-regulated market.

“The PIA mandates the NMDPRA to protect customers, regulate operations, pricing and ensure transparent benchmarks in the gas value chain,” he said.

The minister said its standardised reporting and enforced settlements would strengthen market dependability and reduce counterparty risks, while affordability and competitive trading would reduce barriers and promote efficiency across the value chain.

He said the reforms were critical to the success of the Decade of Gas initiative and would attract private investments into gas processing and transportation.

The minister, while urging industry players to “partner responsibly and operate professionally” to grow the sector, encouraged off-takers to leverage the new structure for stable gas supply in power generation, industry and transportation.

The Authority Chief Executive, NMDPRA, Mr Farouk Ahmed, in his remarks, said the licence would support wholesale gas trading and settlement, strengthening the country’s gas market operations.

According to Ahmed, Nigeria holds 209 trillion cubic feet of proven gas reserves and an estimated 600 trillion cubic feet of potential reserves.

He said the domestic gas market remained constrained by pricing opacity, high transaction costs and limited flexibility despite its enormous resource base.

According to him, the Decade of Gas, Presidential Initiative on Compressed Natural Gas and Nigeria Gas Flare Commercialisation Programme have positioned Nigeria as an attractive gas investment destination.

He said it had implemented several PIA provisions, including the annual Domestic Gas Demand Requirement and Gas Aggregation License, including issuance of wholesale gas supply licenses and revision of the Gas Transportation Network Code.

He said it had set the domestic base price, gas-based industries pricing framework and mobility CNG concessionary pricing, while gas transportation tariffs and gas distribution licenses had been operationalised to deepen the market.

Ahmed said the authority would provide transparent and technology-enabled regulation to support JEX Markets’ operations, adding that it would work with the SEC and other financial market institutions to harmonise rules and standardise contracts.

The ACE said it would promote participation by producers, transporters, aggregators and large buyers to build market liquidity, while capacity building, data transparency and industry education would remain central to strengthening the gas market.

He urged the industry’s players to commit gas volumes, adopt standardised contracts and uphold market rules that sustain investors’ confidence.

Ahmed, while congratulating JEX Markets for meeting the requirements for the pioneer trading license, advised the company to adhere strictly to the license conditions and leverage global expertise to operate a world-class exchange.

The Director-General, SEC, Emomotimi Agama, in his remarks, said that Nigeria’s economic narrative had been tied to the crude oil price cycle for years, adding that a decisive step had been taken to change that narrative through a recognised gas trading platform.

Agama said as the apex regulator of the capital markets, its mandate remained to protect investors, maintain fair, orderly, and transparent markets, and mitigate systemic risk.