FG issues first gas trading licence to boost pricing, liquidity

By : 'Sola Akinsanmi

Date: 11 December 2025 8:00pm WAT

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The Federal Government has issued Nigeria’s first Gas Trading Licence to JEX Markets Limited, authorising the company to operate a Clearing House and Settlement system as part of reforms designed to standardise pricing, deepen market liquidity, and strengthen the domestic gas sector.

The licence was granted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Thursday at a ceremony in Abuja attended by government officials, regulators, investors, and gas producers.

Speaking at the event, the Authority Chief Executive of NMDPRA, Farouk Ahmed, said the licence would establish a transparent, technology-enabled market for wholesale gas transactions.

He explained that the platform would support “transparent price discovery, automated real-time trading, improved market liquidity, reliable clearing and settlement, wider participation by producers, transporters, and industrial off-takers, and enhanced investment confidence.”

Ahmed noted that the licence is in line with Section 159 of the Petroleum Industry Act 2021, which mandates a regulated gas trading framework for wholesale transactions.

“Today we shall be presenting a Gas Trading License and a Clearing House and Settlement Authorisation to JEX Markets Limited in compliance with the provisions of section 159 of the PIA for the trading and settlement of wholesale gas in Nigeria,” he said.

“This licence will unlock new opportunities and finally address pricing opacity, transaction bottlenecks, weak contract sanctity, and low investments.”

He added that the regulator would “actively deploy its 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.”

The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the launch aligned with President Bola Tinubu’s Renewed Hope Agenda, describing gas as “the backbone of Nigeria’s future energy security, industrialisation, and economic diversification.”

He noted that the new framework would immediately improve access, dependability, and affordability in the domestic gas market.

“First, access. We make gas sale and procurement agreements more trustworthy by only letting trusted counterparties into the trading environment,” he said. “Second, dependability. When there is reliable, standardised reporting, enforcement of settlements, and regulated trading, there is less risk of counterparty failure.

Third, affordability. An open, competitive, and properly structured trading environment promotes efficiency, reduces entry barriers, and allows trading entities to offer reduced costs.”

The Director-General of the Securities and Exchange Commission, Emomotimi Agama, described the Clearing House Authorisation as “arguably the most important layer” of the new system, ensuring guaranteed settlement, risk management, transaction finality, and investor protection.

“With this platform, gas will no longer be just a commodity,” he said. “It becomes a tradable financial asset that attracts capital, spurs infrastructure investments, and diversifies our economy.”

Goodluck Ebelo, special adviser on oil and gas to the National Security Adviser, said that gas trading depends on secure pipelines and terminals.

He reported progress in curbing pipeline vandalism and illegal refining, noting that “fewer pipeline breaches, dismantling of illegal refining camps, arrest of major theft syndicates, [and] reduced disruptions to gas transmission” had improved investor confidence.

The new trading system is expected to standardise contracts, ensure publicly reported market-driven prices, guarantee settlement, expand supplier options for off-takers, and provide clearer price signals to pipeline investors, aiming to address long-standing challenges of scarcity, unreliable supply, and high financing costs in Nigeria’s domestic gas sector.

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