The Federal Government has initiated a sweeping reform to transform its domestic gas market, issuing the country’s first-ever Gas Trading Licence to JEX Markets Limited. This landmark move, overseen by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is designed to clean up opaque pricing practices, deepen market liquidity, and position Nigeria as West Africa’s leading gas trading hub.
The licence includes authorization for JEX Markets to operate a Clearing House and Settlement system, establishing a core financial-market infrastructure that will guarantee payment and standardize wholesale gas transactions among buyers and sellers.
Addressing the TCF Paradox
Despite holding over trillion cubic feet (TCF) of proven gas reserves—the largest in Africa—Nigeria’s domestic market has remained largely underdeveloped, hobbled by structural problems:
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Pricing opacity and illiquidity.
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High transaction costs and limited contract flexibility.
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Poor sanctity of gas contracts.
These constraints have been repeatedly blamed for erratic gas-to-power supply, stalled industrial projects, and slow progress in energy transition.
The PIA Mandate for Transparency
NMDPRA Authority Chief Executive, Farouk Ahmed, confirmed that the licence is a key requirement of Section 159 of the Petroleum Industry Act (PIA) 2021.
The JEX platform is expected to usher in a transparent, technology-enabled marketplace that will support:
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Transparent Price Discovery
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Automated Real-Time Trading
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Improved Market Liquidity
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Reliable Clearing and Settlement
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Enhanced Investment Confidence
Ahmed stressed that the regulator will actively deploy its instruments to drive participation by producers, transporters, aggregators, and large-scale buyers, ensuring that the full operationalization of this provision unlocks the extensive investment potential required for improved gas supply and utilization in strategic sectors like power, industry, and transportation.
