A major dispute over distribution rights for a planned $100 million gas pipeline has halted progress on Nigeria's initiative to lower energy costs for manufacturing clusters in the country's southwest region.

The conflict centers on an 80-kilometer pipeline designed to transport natural gas from Ogere to the Oluyole Industrial Estate in Ibadan.

At the heart of the disagreement is a Gas Distribution License issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority to NIPCO Gas Limited and its joint venture partner, Nigeria Gas Marketing Limited, a subsidiary of the state-owned NNPC Limited.

NIPCO has accused Shell Nigeria Gas of attempting to operate within its exclusive distribution zone.

NIPCO Managing Director Nagendra Verma stated that allowing a competitor into the territory violates the exclusivity provisions of the Petroleum Industry Act of 2021 and undermines the company’s substantial financial investments.

Verma added that Shell currently possesses no gas infrastructure within the disputed Ibadan corridor.

Conversely, regulatory officials confirmed they are actively mediating the clash. George Ene-Ita, director of public affairs for the regulatory authority, said the agency has hosted multiple meetings to resolve the matter in a way that benefits all parties, particularly the residents and businesses of Oyo State.

The Oyo State government has also intervened. State Energy Commissioner Dahud Shangodoyin recently noted that officials are considering escalating the matter back to federal regulators due to delays in formal responses from the involved corporations. Shell Nigeria Gas has not publicly responded to inquiries regarding the dispute.

The prolonged delay threatens to stall the federal government’s broader "Decade of Gas Initiative," which aims to transition local industries away from expensive diesel fuel.

The Oluyole Industrial Estate hosts more than 20 large-scale factories and hundreds of smaller enterprises. Local manufacturers estimate that the completed pipeline would cut their energy expenditures by over 50%, significantly boosting industrial productivity.