Abuja: The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) officially granted Nigeria’s inaugural Gas Trading Licence and Clearing House and Settlement Authorisation to JEX Markets Limited. This milestone, aligned with the Petroleum Industry Act (PIA), was marked by a ceremony in Abuja, attended by Dr. Ekperikpe Ekpo, Minister of State Petroleum Resources (Gas), NMDPRA’s Authority Chief Executive Mr. Farouk Ahmed, Oscar Onyema, Chairman of JEX Markets, and other dignitaries.
According to News Agency of Nigeria, JEX Markets is now licensed to establish and operate a gas trading exchange platform, which will include clearing and settlement functions for natural gas and its derivatives within Nigeria. This platform is set to act as Africa’s first commodity exchange for gas resources, aiming to enhance transparency and standardisation in trading, and positioning Nigeria as a potential regional hub for gas pricing and energy market activities.
The licencing process involved collaboration with the Securities and Exchange Commission (SEC), which granted JEX approval as a licensed commodity exchange. Dr. Ekpo, in his keynote address, emphasized the immediate benefits of this license, such as improved market access for credible traders across various sectors. He noted that the license aligns with President Bola Tinubu’s Renewed Hope Agenda on energy security and economic diversification, providing a governance framework and a trusted environment for investors and traders.
Dr. Ekpo praised the NMDPRA and JEX Markets Limited for launching the first online gas trading and settlement platform, marking a new era for transparent, competitive, and investment-ready gas markets in Nigeria. He stressed that Nigeria’s vast gas reserves can only deliver value if managed within an efficient and well-regulated market and highlighted that the PIA mandates NMDPRA to protect customers, regulate operations and pricing, and ensure transparency in the gas value chain.
The minister also stated that the platform’s standardised reporting and enforced settlements would enhance market dependability and reduce counterparty risks. He noted that affordability and competitive trading would lower barriers and promote efficiency in the value chain, crucial for the success of the Decade of Gas initiative and attracting private investments into gas processing and transportation.
Mr. Farouk Ahmed, Authority Chief Executive of NMDPRA, remarked that the license would bolster wholesale gas trading and settlement, thus strengthening Nigeria’s gas market operations. According to Ahmed, Nigeria possesses 209 trillion cubic feet of proven gas reserves and an estimated 600 trillion cubic feet of potential reserves, although the domestic gas market faces challenges such as pricing opacity and high transaction costs.
He elaborated on initiatives like the Decade of Gas, Presidential Initiative on Compressed Natural Gas, and Nigeria Gas Flare Commercialisation Programme, which have positioned Nigeria as an attractive destination for gas investments. He highlighted the implementation of several PIA provisions, such as the Domestic Gas Demand Requirement and Gas Aggregation License, and efforts to deepen the market through operationalized gas transportation tariffs and distribution licenses.
Ahmed assured that NMDPRA would provide transparent and technology-enabled regulation to support JEX Markets, working with SEC and financial market institutions to harmonise rules and standardise contracts. He urged industry players to commit gas volumes, adopt standardised contracts, and maintain market rules to sustain investor confidence.
The Director-General of SEC, Emomotimi Agama, acknowledged that Nigeria’s economic narrative has long been tied to the crude oil price cycle. However, he asserted that the establishment of a recognised gas trading platform marks a decisive step towards changing this narrative, with SEC’s mandate being to protect investors and maintain fair, orderly, and transparent markets.