The Federal Government on Thursday issued Nigeria’s first-ever Gas Trading Licence, launching a wide-ranging reform designed to dismantle opaque pricing systems, deepen market liquidity, and position the country as West Africa’s leading hub for gas trading.

The licence, granted to JEX Markets Limited by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), also confers approval to operate a Clearing House and Settlement system, a critical financial-market infrastructure that guarantees payments and standardises transactions between gas buyers and sellers.

The landmark event, held at the Transcorp Hilton, Abuja, drew top government officials, regulators, security chiefs, investors, and gas producers, all united in a push to overhaul Nigeria’s underdeveloped domestic gas market, long plagued by pricing opacity, contract failures, poor liquidity, and limited investment.

Nigeria holds over 209 trillion cubic feet of proven gas and an estimated 600 TCF of potential reserves, Africa’s largest. Yet decades of market dysfunction have kept the domestic gas economy constrained, undermining electricity supply, slowing industrial growth, and stalling the country’s energy-transition goals.

The new licensing regime seeks to reset the system.

Speaking at the ceremony, NMDPRA Authority Chief Executive, Farouk Ahmed, described the licence as the beginning of a transparent, technology-enabled gas marketplace where trading will be conducted on standardised contracts with automated reporting and guaranteed settlement.

He said the JEX platform will deliver:

Transparent price discovery

Automated, real-time trading

Stronger market liquidity

Reliable clearing and settlement

Greater participation by producers, transporters, and industrial off-takers

Increased investor confidence

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

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

He emphasised that the real test of the licence will be in the transformation the platform delivers, not the ceremony itself, adding that the regulator will provide a robust, technology-driven framework to ensure success.

Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the approval aligns with President Bola Tinubu’s Renewed Hope Agenda, which identifies natural gas as the backbone of Nigeria’s industrial and economic expansion.

He outlined three immediate market shifts that the new regime will trigger:

1. Access: Only “fit-and-proper” players will now be admitted into the trading ecosystem, ensuring credibility and protecting market integrity.
2. Dependability: Standardised reporting and regulated settlements will help curb contract failures and strengthen supply-chain reliability.
3. Affordability: Transparent, competitive trading is expected to gradually drive down gas prices for power, manufacturing, and transportation.

“This licence paves the way for a new, regulated market where reliable traders can do business safely and where investors can commit capital with confidence,” Ekpo said.

He added that the platform would support the Decade of Gas Initiative, the Presidential CNG Initiative, and efforts to expand gas use in power generation, manufacturing, and transportation.

Director-General of the Securities and Exchange Commission, Emomotimi Agama, described the development as the beginning of Nigeria’s transition from a crude-oil-driven economy toward a financialised gas economy.

He said the Clearing House Authorisation is “arguably the most important layer” of the new system, guaranteeing settlement finality, enforcing risk management, and protecting market integrity.

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

He called on banks, asset managers, and insurers to develop financial products tied to the emerging Nigerian Gas Price Index.

Representing the National Security Adviser, the Special Adviser on Oil and Gas, Goodluck Ebelo, said no trading system can thrive without secure pipelines and terminals.

He noted that the NSA-led Joint Coordination Platform has made significant gains against pipeline vandalism, oil theft, and illegal refining, achievements that have already improved gas transmission stability and investor confidence.

He said the framework will now be extended to safeguard new pipelines required for the gas trading ecosystem.

“Nigeria’s gas future is secure, and we will continue to defend it with every necessary resource,” he said.

For decades, Nigeria’s domestic gas market has been hindered by unreliable supply, unstable prices, opaque pricing structures, and persistent contract failures. Previous reforms, including the Gas Network Code and Gas Aggregation programme, provided partial relief but failed to eliminate deep-rooted structural problems.

Under the new trading system:

Gas contracts will be standardised

Prices will be market-driven and publicly reported

Settlement will be guaranteed

Off-takers will have multiple supply options

Pipeline investors will receive clearer price signals

The JEX licence marks the federal government’s most ambitious attempt yet to create a liquid, efficient, transparent, and investor-friendly domestic gas market capable of driving industrialisation and long-term energy security.