Nigeria’s domestic natural gas market is expected to transition to a fully established willing buyer, willing seller framework by September 24, 2028, as the Federal Government moves to deepen market competition, attract investment and expand domestic gas utilisation.
The target was announced by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mallam Rabiu A. Umar, at a Gas Market Maturity Workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund (PTDF), Abuja.
Umar said the transition would be guided by measurable indicators designed to determine when different segments of the Nigerian gas market are sufficiently mature to operate with greater reliance on commercial transactions rather than administered pricing.
The proposed shift is consistent with the market reforms envisaged under the Petroleum Industry Act (PIA) 2021, which provides for the progressive development of a more commercially driven domestic gas market.
He said the objective was to create a market in which gas could become more accessible and affordable to Nigerians while providing the commercial certainty required to stimulate investment in gas production, infrastructure and utilisation.
“Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,” Umar said.
According to the NMDPRA chief executive, the transition should culminate in a market where buyers and sellers can negotiate commercial contracts under transparent and competitive conditions.
“The journey we are starting should lead us to a place where we should target a 24-month at best period within which we will be able to declare the market to be truly a willing buyer, willing seller market,” he said.
Market maturity to determine transition
Umar stressed that Nigeria could not move to a fully liberalised gas market simply on the basis of policy declarations.
He said the transition would require clear benchmarks, thresholds and safeguards capable of demonstrating that the market had attained the necessary level of maturity.
Among the indicators identified are the availability and diversity of gas supply, the number and quality of buyers and sellers, access to transportation infrastructure, the strength and enforceability of commercial contracts, payment reliability, delivery obligations, market information and the availability of credible price signals.
The approach is particularly significant as Nigeria seeks to increase domestic gas production and consumption under the Decade of Gas programme.
Recent industry discussions have similarly focused on the need to move from regulated domestic gas pricing towards a market-based framework while ensuring that infrastructure and supply conditions are sufficiently developed to support the transition.
Gas supply remains a major constraint
Despite Nigeria’s substantial natural gas resources, Umar acknowledged that domestic supply remains tight, warning that infrastructure expansion must be matched by adequate gas molecules.
He specifically pointed to the need to ensure that major infrastructure projects, including the Ajaokuta-Kaduna-Kano (AKK) gas pipeline, have sufficient gas supply to operate effectively and generate commercial value.
“If you look at supply, for example, on the domestic side, it is still tight, no matter how you look at it. We have a lot of work to do in our infrastructure space,” he said.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline.”
The issue of infrastructure utilisation is central to Nigeria’s gas ambitions, with the AKK pipeline expected to support the movement of gas from the southern part of the country to northern markets and strengthen gas availability for power generation and industrial users. NMDPRA has also identified improved network reconciliation, measurement and transmission reliability as important to strengthening domestic gas supply.
Regulator moves to strengthen competition
Umar said the role of NMDPRA would evolve alongside the development of the gas market.
Rather than relying primarily on price regulation, he said the regulator would increasingly focus on establishing market rules, ensuring fair and non-discriminatory access to infrastructure, protecting competition and monitoring market conduct.
The Authority has commenced consultations on proposed regulations addressing anti-competitive practices and behaviour in the midstream and downstream petroleum sector.
The proposed framework is being developed pursuant to Section 216 of the PIA and is intended to address issues including abuse of market dominance, promote fair competition and improve access to essential petroleum infrastructure.
Umar also called for a more realistic assessment of the different segments of Nigeria’s gas market, noting that they are not all at the same stage of development.
He said the transition would therefore need to be properly sequenced, with individual market segments assessed against defined thresholds before moving towards greater liberalisation.
Gas distribution licences expected in Q4 2026
The NMDPRA chief executive disclosed that the Authority was nearing completion of the process for issuing gas distribution licences, with qualified companies expected to receive licences in the fourth quarter of 2026.
He also highlighted efforts to increase domestic utilisation of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG).
According to Umar, several LNG and gas-to-power projects are also being developed, while greater domestic gas utilisation could support electricity generation, reduce reliance on imported energy and limit transmission losses associated with transporting electricity over long distances.
He said the Authority was committed to creating a predictable, coherent and transparent regulatory environment capable of attracting long-term investment into Nigeria’s gas industry.
“For you to take an FID in a gas investment, you need to have a long-term contract,” Umar said, stressing that the regulator was prepared to engage with individual projects to identify regulatory measures capable of supporting investment and development.
Decade of Gas targets supply growth
Also speaking at the workshop, the Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said Nigeria could achieve a willing buyer, willing seller gas market before the end of the first horizon of the Decade of Gas programme in 2030.
Ubong said the programme had established specific markers for market development, including a target to increase gas supply to 12.6 billion cubic feet per day by 2030.
He said 16 major infrastructure projects had been identified to support the expansion of the gas market, while more than 60 projects capable of generating about 15 billion cubic feet per day of gas demand had also been identified.
A mature gas market, he added, would require stronger development of the gas-to-power segment as well as wider access to cooking gas.
The wider gas-development agenda is also reflected in NNPC Limited’s 2026 Gas Master Plan, which targets increased gas production and greater supply to power, CNG, LPG, LNG and industrial users, alongside the development of a competitive willing buyer-willing seller commercial regime.
Gas industry seeks clear transition milestones
The President of the Nigerian Gas Association (NGA), Engr. Mrs Yetunde Taiwo, said the transition to a willing buyer, willing seller market should be anchored on clearly defined milestones.
Taiwo said the NGA had consistently supported the development of a commercially driven gas market but cautioned that the transition needed to be properly sequenced.
“As NGA, what we would like to see really is to see those goalposts, those milestones that have been set, that makes it a realistic journey for us to say we have achieved a willing buyer, willing seller status,” she said.
She acknowledged the progress made in Nigeria’s gas industry over the past decade but said significant gaps remained.
Taiwo called for stronger collaboration among government, regulators and industry, with government providing policy direction, regulators establishing predictable rules and industry investing, innovating and executing projects.
The objective, she said, should be a gas market capable of attracting investment, encouraging broader participation and delivering reliable gas to industries, businesses and consumers.
The Gas Market Maturity Workshop brought together stakeholders to examine the regulatory, commercial, infrastructure and supply conditions that must be addressed as Nigeria moves towards a more competitive and market-driven domestic gas industry.
The September 2028 target now provides a defined timeframe against which progress towards that transition can be measured, even as stakeholders work to close the supply, infrastructure, contracting and market-access gaps that remain across the gas value chain.
