Nigeria has issued its first gas trading licence in a major reform aimed at ending opaque pricing practices, improving market liquidity and positioning the country as West Africa’s leading gas trading hub.
The licence, granted to JEX Markets Limited by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), also authorises the company to operate a Clearing House and Settlement system, a key financial-market infrastructure designed to guarantee payments and standardise transactions between gas buyers and sellers.
The announcement was made on Thursday at a ceremony in Abuja attended by senior government officials, regulators, security chiefs, investors and gas producers. Officials said the move is part of broader efforts to reform Nigeria’s domestic gas market, long constrained by pricing opacity, contract breaches, high transaction costs and chronic illiquidity.
Nigeria holds 209 trillion cubic feet of proven gas reserves and up to 600 trillion cubic feet in estimated potential reserves, the largest on the continent. Yet despite this resource base, domestic gas supply has struggled to meet demand, affecting power generation, industrial output and progress in Nigeria’s energy-transition plans.
NMDPRA chief executive Farouk Ahmed said the licence marks the start of a more transparent and technology-driven market in which wholesale gas will be traded on standardised contracts with real-time reporting.
“The JEX platform will support transparent price discovery, automated real-time trading, improved market liquidity, reliable clearing and settlement, wider participation by producers, transporters and industrial off-takers, and enhanced investment confidence,” he said.
Ahmed said the licensing framework is being implemented under Section 159 of the Petroleum Industry Act (PIA) 2021, which mandates the creation of a regulated gas trading system to support wholesale transactions.
“This licence will unlock new opportunities and finally address pricing opacity, transaction bottlenecks, weak contract sanctity and low investments,” he said. He noted that the domestic gas market has long been hampered by “restricted access to gas, limited flexibility and poor sanctity of gas contracts.”
The NMDPRA boss said the regulator will intensify oversight to expand participation in gas trading by producers, transporters, aggregators and large-scale consumers.
Officials hope the new clearing and settlement system will help stabilise the sector by reducing payment risks, encouraging long-term contracts and attracting fresh capital into processing, transportation and distribution infrastructure.
Industry stakeholders say that if fully implemented, the reform could help ease long-standing supply disruptions in Nigeria’s gas-to-power sector, revive stalled industrial projects and establish Nigeria as the primary trading node for natural gas in West Africa.
