Over half of the funding is expected to be used on replace ageing gas mains in line with targets set out by the Health and Safety Executive.
Speaking about the plans, Mr Buchanan looked to future, saying: "This has allowed us to get a better deal for customers by challenging the companies to deliver investment and operate the networks more efficiently.
"At the next review we will have five more years of evidence of how the GDNs can improve efficiency and would expect to see even more significant benefits for customers at that stage."
Ofgem has announced the proposals a week or so after the body unveiled new energy ratings to help energy customers make informed decisions on the energy efficiency of products available to them.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.