Gas Trading, Settlement and Exchange Platforms: A focus on Nigeria’s Gas Sector

Nigeria, with its vast natural gas reserves of over 209 trillion cubic feet, is taking significant steps toward market liberalization and transparency. The Regulations introduce guidelines for gas exchanges and clearing houses, setting governance and risk management standards while ensuring compliance and enforcement.

A key feature of the Regulations is the establishment of a Settlement Guarantee Fund, a crucial safeguard designed to protect the market from settlement failures and enhance investor confidence. Additionally, the framework promotes transparent price discovery mechanisms, aligning Nigeria’s gas market with global best practices.

While these reforms present exciting opportunities, they also pose challenges, such as high compliance costs and regulatory uncertainties regarding license withdrawals and renewals, and the domiciliation of the Settlement Guarantee Fund. Addressing these concerns will be vital to ensuring a balanced and sustainable gas trading ecosystem.