Federal Government Unveils First Gas Trading, Clearing Platform To Boosts Investment

The federal government has unveiled Nigeria’s first gas trading and clearing platform, an initiative aimed at attracting more investment into the country’s gas sector.

Unveiled on Thursday, the platform, known as the Gas Trading Licence, Clearing House, and Settlement Authorisation, is designed to increase transparency, efficiency, and liquidity in the natural gas market.

By providing a centralised electronic marketplace for gas trading, it will enable buyers and sellers to transact more seamlessly and at competitive prices.

The initiative, spearheaded by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in collaboration with the Securities and Exchange Commission (SEC), licenses Jex Markets to establish and operate a Gas Clearing House and Settlement Authorisation platform.

Speaking during the event in Abuja, the minister of State for Petroleum Resources (Gas), Dr Ekperikpe Ekpo, said that the initiative was critical for the success of the ‘Decade of Gas Initiative’, adding that the trading environment and the benefits that come with it will strengthen the level of industrialisation and ensure the injection of private investments into the gas processing and transport sectors.

For Ekpo, this will ensure that the country derives economic growth that is driven by its natural resource endowment.

Noting that Nigeria is richly endowed with natural gas reserves, among the biggest in the world, Ekpo said if the existing market where the gas will flow is not efficient, reliable, and well-regulated, it will not be possible for the government to realise the ultimate potential of the resource.

He said, “This launch is completely consistent with the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, who stated that natural gas will play the central role in the energy security, industrialisation, and economic diversification. The President’s vision requires a regulatory environment that is predictable, trusted, and designed to unlock value. Today’s inauguration is a demonstration of that commitment.

“The Gas Trading Licence introduced today is decisive on this front, paving the way for a new, regulated market where reliable traders will feel safe doing business, where businesses can plan, and where investors can invest, knowing that it will safeguard both their capital and the public interest.

“The Gas Trading Licence is, therefore, the implementation of the provisions of the licensing requirement that make the investment possible. It provides the governance framework essential for a modern gas industry.”

Also speaking, the NMDPRA chief executive, Farouk Ahmed, said that the move was in compliance with the provisions of Section 159 of the Petroleum Industry Act (PIA), for the trading and settlement of wholesale gas in Nigeria.

Ahmed noted that the implementation and full operationalisation of this provision of the PIA, will further unlock the extensive opportunity and investment potentials of the gas Industry through the improved supply and utilisation of the country’s vast gas resource.

Ahmed said that despite having over 209 trillion cubic feet (TCF) of proven gas reserves, the largest in Africa and an estimated 600 TCF of potential reserves, Nigeria’s domestic gas market has remained underdeveloped and constrained by pricing opacity, high transaction costs, limited flexibility, market illiquidity, poor sanctity of gas contracts, restricted access to gas and low investments.

“The Gas Trading Licence and other relevant regulatory instruments administered by the NMDPRA have continued to promote the sustainable development of the gas markets through the application of global best practices that is ensuring: transparency and efficiency, price discovery and reporting safe and reliable market trading practices.

“It also reaffirms the commitment of the Authority to the actualisation of one of the core objectives of the PIA, which is the growth of the domestic gas sector into a dynamic and competitive trading and supply hub.

“As the regulator of Nigeria’s midstream and downstream petroleum sector, the Authority recognizes that the true test of licensing JEX Markets is not in the ceremony of today, but in the transformation it must deliver tomorrow.

“To ensure that JEX succeeds as Nigeria’s pioneering gas trading, clearing and settlement platform, we will provide a firm, transparent and technology‑enabled regulatory framework under the PIA, giving investors the certainty and confidence required to commit long‑term capital to the gas value chain,” Ahmed added.

On the his part, the director-general, Securities and Exchange Commission, Dr Emomotimi Agama, said, “For decades, our economic narrative has been heavily tied to the crude oil price cycle. Today, we take a decisive step to change that script. By establishing a recognised gas trading platform, we achieve several critical objectives such as : price discovery & transparency, market liquidity & depth, infrastructure development incentive.”

He explained that as the apex regulator of the capital markets, the Securities and Exchange Commission’s mandate is clear: to protect investors, maintain fair, orderly, and transparent markets, and mitigate systemic risk. This mandate, he said, fully extends to the nascent commodities trading ecosystem.