The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr. Saidu Mohammed, has said that most electricity generation companies (GenCos) lack bankable gas sales agreements necessary for sustained gas supply, the authority said in a statement.

Mohammed spoke on challenges in the gas-to-power segment of Nigeria’s energy sector, addressing factors that affect electricity supply levels, according to the published report.

Gas Production and Domestic Market

The regulator said Nigeria currently produces about eight billion standard cubic feet of gas per day and exports significant volumes through the Nigeria LNG facility, but added that the domestic gas market for power generation remains underdeveloped.

Mohammed noted that although the country has more than 13,000 megawatts of installed generation capacity, actual electricity supply has remained around 5,000 megawatts for more than two decades.

He said the recurring “no gas” challenge cited by power plants is largely linked to the absence of bankable and enforceable gas sales agreements.

Commercial Arrangements in Gas-to-Power

According to the NMDPRA chief executive, only one or two power plants currently have commercially viable gas contracts.

He said that without firm buyers and credible payment structures, gas molecules will not flow consistently to GenCos.

Mohammed said the Petroleum Industry Act (PIA) has introduced reforms to address structural gaps in the gas-to-power value chain.

These reforms include prioritising domestic gas supply for power generation, enabling cost-reflective pricing, and strengthening regulatory oversight.

He added that the authority is committed to enforcing domestic gas supply obligations, improving pricing transparency and accelerating gas infrastructure development to ensure reliable and sustainable gas supply to power plants across the country.