NMDPRA Fixes Interim $1.13/Mscf Gas Transportation Tariff For Pipelines

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has approved an interim transportation tariff of $1.13 per thousand standard cubic feet (Mscf) for the NNPC Gas Infrastructure Company Limited (NGIC). This tariff will be in effect from July 1 to December 31, 2025, covering all six major gas transportation networks across Nigeria.

The interim tariff aims to improve the economic viability of Nigeria’s gas pipeline infrastructure while providing flexibility in payment currency. This flexibility is intended to help operators avoid currency mismatches affecting their debt and cost structures.

The NMDPRA, in a release, said that the interim tariff would serve as a transitional measure. The Authority will meet stakeholders during this period to finalise and formally adopt the permanent gas transportation tariff methodologies.

The NMDPRA noted that the tariff determination complies with sections 122 and 123 of the Petroleum Industry Act (PIA) 2021 and the Natural Gas Pipeline Tariff Regulations of 2023. The $1.13/Mscf rate applies uniformly to all gas transportation customers, regardless of the distance gas is moved along the pipeline.

This uniformity is achieved through the postage stamp tariff methodology, which sets a single tariff rate across all users and locations, eschewing distance-based or zonal tariff variations.

The approval followed a comprehensive review process that considered market conditions, affordability, the need for fair returns on investment, and other factors stipulated by the PIA 2021.

The interim tariff covers the Escravos–Lagos Pipeline System (ELPS I & II), Oben–Ajaokuta, Oben–Geregu, Obiafu–Obrikum–Oben (OB3), the Eastern Network, and the Ajaokuta–Kaduna–Kano (AKK) Pipeline System.

The Authority also urged all licensees and relevant stakeholders to apply the interim tariff in their transactions, in line with the Petroleum Industry Act 2021 provisions and the Natural Gas Pipeline Tariff Regulations 2023.