Precious Anga
Lagos — Nigeria’s domestic gas market expanded by 30 per cent between January 2022 and January 2025, signalling growing investor confidence and improved market activity following reforms introduced under the Petroleum Industry Act (PIA) and recent executive orders by President Bola Tinubu.
A new legal analysis by Lagos-based law firm Tope Adebayo LP revealed that domestic gas sales increased from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2 bscf in January 2025, driven by improved regulatory clarity, pricing reforms and stronger investment incentives.
The report noted that Nigeria, despite holding more than 206 trillion cubic feet of proven gas reserves, has historically struggled to convert its vast resources into reliable domestic energy supply due to weak infrastructure, underinvestment and persistent gas flaring.
According to the firm, the PIA has become a major catalyst for change in the sector.
“The PIA represents the most comprehensive reform of Nigeria’s petroleum sector in decades and has established a stronger foundation for domestic gas development through regulatory clarity, pricing liberalisation mechanisms, infrastructure support and enhanced investment incentives,” the report stated.
The analysis highlighted several reforms that have improved market performance, including the creation of separate regulators for upstream and midstream/downstream operations, open-access infrastructure provisions, pricing liberalisation and the Domestic Gas Delivery Obligation framework, which compels producers to supply gas to strategic sectors such as power generation and manufacturing.
It also noted progress in reducing gas flaring and expanding the Nigerian Gas Flare Commercialisation Programme, alongside new incentives designed to attract private investment.
“These interventions signal a deliberate effort by the government to improve project economics and enhance Nigeria’s competitiveness as a destination for gas investments,” Tope Adebayo LP said.
However, the report warned that policy reforms alone will not unlock the sector’s full potential.
“Large-scale outcomes remain constrained by persistent infrastructure gaps, payment risks within the power sector, legacy debts, and implementation inefficiencies. The transition from policy to practice is clearly underway, but it remains incomplete,” the report added.
The firm stressed that sustained investments in pipelines, gas processing facilities, transportation networks and distribution infrastructure will be critical to achieving long-term growth.
It added that while the foundations for a stronger domestic gas market have been established, Nigeria must bridge the gap between policy design and execution to fully realise its Decade of Gas ambitions.
