ABUJA — Nigeria has set September 24, 2028 as the target date for transitioning its domestic gas market to a fully established willing buyer, willing seller framework, signalling a major shift towards greater commercial pricing and contracting in the sector.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said the transition would be based on measurable market conditions rather than a blanket deregulation of gas prices.
NMDPRA Chief Executive, Rabiu Umar, disclosed the target on Thursday at a Gas Market Maturity Workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund (PTDF) in Abuja.
Umar said the proposed transition was consistent with the Petroleum Industry Act (PIA) and the Decade of Gas objective of transforming Nigeria into a gas-powered economy by 2030.
“Gas must be affordable for Nigerians while supporting President Ahmed Tinubu’s investment reforms,” Umar said.
He described the September 2028 target as a significant milestone in the development of Nigeria’s gas market.
“This is the first time that we have been bold enough to set a clear target for our gas market transition,” he said.
PIA provides framework for market transition
According to Umar, the PIA envisages a gradual shift from a gas market largely coordinated through regulation towards one increasingly driven by commercial contracts between willing buyers and sellers.
He said Section 167 of the PIA provides the basis for the domestic gas market to progressively move towards a system where direct price regulation can recede as competition, commercial contracting and market depth improve.
“The journey we are starting should lead us to a place where we should target a 24-month at best period within which we will be able to declare the market to be truly a willing buyer, willing seller market,” he said.
The regulator, however, said the transition would depend on the market meeting clearly defined thresholds.
Gas supply remains key constraint
Umar identified gas supply availability and diversity, the number and quality of buyers and sellers, transportation access, contract strength, payment reliability, delivery performance, market information and credible price signals as key indicators of market maturity.
He acknowledged that Nigeria’s domestic gas supply remains tight despite its huge gas reserves.
The challenge, he said, is not simply to build pipelines and other infrastructure but to ensure there is sufficient gas to utilise them.
“If you look at supply, for example, on the domestic side, it is still tight, no matter how you look at it. We have a lot of work to do in our infrastructure space.”
He added: “The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline.”
The warning has particular significance for major projects such as the Ajaokuta-Kaduna-Kano (AKK) pipeline, whose commercial value will depend partly on reliable gas supply.
NMDPRA moves on competition rules
As the market evolves, Umar said the regulator’s role would increasingly focus on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
He disclosed that NMDPRA had begun consultations on draft regulations addressing anti-competitive practices, aimed at translating the competition provisions of the PIA into enforceable regulatory rules.
The move is expected to become increasingly important as Nigeria shifts towards a more commercially driven gas market with potentially greater participation by private investors.
Umar also said the authority was nearing completion of its process for issuing gas distribution licences, with qualified companies expected to receive licences in the fourth quarter of 2026.
Nigeria targets higher domestic gas consumption
NMDPRA is also seeking to increase domestic utilisation of LPG, LNG and CNG, alongside the development of gas-to-power and other gas-based industrial projects.
Umar said greater domestic gas utilisation could support electricity generation, reduce dependence on imported energy and limit transmission losses associated with transporting electricity over long distances.
For investors, the expansion of domestic gas demand is critical because a deeper market could provide the long-term contracts required to underpin financing and final investment decisions for major projects.
“For you to take an FID in a gas investment, you need to have a long-term contract,” Umar said.
He added that NMDPRA was prepared to engage with individual projects to identify regulatory measures capable of supporting investment.
Decade of Gas targets 12.6 Bcf/d supply
The Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said Nigeria could achieve a willing buyer, willing seller gas market before the end of the programme’s first horizon in 2030.
Ubong said the initiative had established targets for expanding both gas supply and demand, including increasing gas production and supply to 12.6 billion cubic feet per day (Bcf/d) by 2030.
He said 16 major infrastructure projects had been identified to support gas-market expansion, while more than 60 demand-side projects capable of generating about 15 Bcf/d of gas demand had also been identified.
According to him, a mature gas market would require not only adequate supply infrastructure but also a functioning gas-to-power market and wider access to cooking gas.
Gas industry seeks clear liberalisation milestones
The President of the Nigerian Gas Association (NGA), Yetunde Taiwo, backed the move towards a commercially driven gas market but stressed the need for clearly defined milestones.
Taiwo said the transition must be carefully sequenced to prevent the market from being liberalised either prematurely or too slowly.
“As NGA, what we would like to see really is to see those goalposts, those milestones that have been set, that makes it a realistic journey for us to say we have achieved a willing buyer, willing seller status,” she said.
She said Nigeria had made progress in developing its gas industry over the past decade but still faced substantial investment and market-development challenges.
Taiwo called for stronger collaboration among government, regulators and industry, with government providing policy direction, regulators establishing predictable rules and companies investing in infrastructure, technology and projects.
She said the ultimate objective should be a gas market capable of attracting long-term capital, expanding participation and delivering reliable gas to industries, businesses and households.
Investment case depends on market maturity
The September 2028 target places market maturity, reliable supply and bankable contracts at the centre of Nigeria’s next phase of gas-sector development.
For investors, the transition could improve price discovery and commercial certainty, but the market will need to overcome constraints around gas availability, transportation infrastructure, payment discipline, contracting and demand.
The Abuja workshop therefore focused on establishing measurable conditions for determining when different segments of the domestic gas market are ready to move towards a willing buyer, willing seller model.
The broader objective is to create a commercially sustainable gas market capable of supporting Nigeria’s industrialisation, power generation, energy access and investment ambitions under the Decade of Gas.
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