Introduction

The Nigerian Midstream and Downstream Petroleum Regulatory Authority has taken a significant step to broaden gas supply access across key industrial sectors. At the 20th Oil Trading and Logistics Africa Downstream Week in Lagos, Chief Executive Mallam Rabiu Umar officially launched Revision II of the Nigerian Gas Transportation Network Code, a regulatory framework designed to standardize gas transportation and ensure equitable distribution.

What Happened

The revised code serves as the official rulebook for gas movement within Nigeria's shared pipeline network, establishing protocols for how producers inject gas, how quantities are measured, and how nominations are processed. Umar highlighted that approximately 60 percent of gas processed in September was directed toward power plants, factories, the Nigeria Liquefied Natural Gas project, and the West African Gas Pipeline, while cooking gas demand continues to outstrip supply. The launch also underscored ongoing infrastructure projects, including the Oben-Obiafu-Obrikom pipeline, the Escravos-Lagos Pipeline System midline compressor nearing completion, and the Ajaokuta-Kaduna-Kano route, which is more than 80 percent complete. Once fully operational, these pipelines are expected to double national gas transport capacity from 2.2 to 4.4 billion cubic feet per day, connecting southern supply sources with northern demand centers. Since the first revision, additional shippers have joined the network, and imbalance on the Western network has decreased by roughly 30 percent. Revision II introduces clearer provisions on the shrinkage factor, a critical element that previously contributed to avoidable losses when gas of incorrect composition was injected into the system.

Why This Matters

Beyond the technical updates, the code revision carries significant implications for Nigeria's energy security and industrial competitiveness. A notable shift in downstream dynamics was highlighted: a year ago, more than half of petrol stock in Nigerian tanks was imported, but last month three in every four litres were refined domestically, signaling a meaningful step toward energy independence. However, Umar cautioned that much of the current supply still hinges on a single large refinery operating above nameplate capacity, underscoring the need for diversity through modular refineries, the four national refineries, and competitive imports. The code also introduces harmonized standards for cross-border gas movement, covering the West African Gas Pipeline, the proposed Trans-Saharan Pipeline to Algeria, and the Trans-African Pipeline to Morocco. On the consumption side, Liquefied Petroleum Gas usage has risen by nearly half since 2021, and a presidential directive aims to double Compressed Natural Gas penetration by year-end to enhance energy flexibility. Stockpile data shows petrol cover at 24 days - below the 30-day threshold - while cooking gas remains tight, and diesel and aviation fuel sit comfortably above recommended levels. With global IEA guidelines targeting 90 days of stock, Nigeria is aiming for a 30-to-45-day window, a goal that advanced strategic reserve talks with NNPC at depots in Ibadan, Enugu, and Suleja are designed to support.

Key Takeaways

  • NMDPRA has launched Revision II of the Nigerian Gas Transportation Network Code to broaden gas access for power plants, fertiliser facilities, and shippers.
  • The code establishes fair rules for gas measurement, nomination, and shrinkage factor management, reducing avoidable losses in the network.
  • Critical infrastructure projects - including the OB3 pipeline, ELPS midline compressor, and Ajaokuta-Kaduna-Kano route - are advancing and will double national gas transport capacity upon completion.
  • Domestic refining progress was highlighted, with three-quarters of petrol now sourced locally, though supply diversity remains a priority.
  • LPG consumption has grown by almost 50 percent since 2021, and a presidential directive targets doubled CNG penetration by year-end.
  • Fuel quality initiatives include the rollout of nine new laboratories by mid-2027, ensuring all petrol meets specification and monthly market data is publicly available.
  • NMDPRA is advancing strategic gas reserves with NNPC at depots in Ibadan, Enugu, and Suleja to cushion the economy against supply and price shocks.
  • The regulator proposes a West Africa reference price and aligned fuel standards to reduce dependence on European benchmarks such as ARA.

Conclusion

The introduction of Revision II marks a pivotal moment for Nigeria's midstream gas sector, offering a clearer, more equitable framework for transportation and utilization. As infrastructure projects come online and domestic refining capacity expands, the code is expected to deepen energy security, attract investment, and ensure that more of Nigeria's vast gas reserves translate into tangible economic benefits. Stakeholders across the power, fertiliser, and shipping sectors are encouraged to familiarize themselves with the new provisions and engage with the authority as the code takes full effect. With coordinated policy, strategic reserves, and quality assurance expanding, the pathway toward a more self-sufficient and prosperous energy future is becoming increasingly tangible.