Nigeria’s Domestic Gas Market Gains Momentum Under PIA, Executive Orders -Tope Adebayo LP

Nigeria’s ambitious push to transform its vast natural gas resources into a catalyst for economic growth is gaining momentum under the Petroleum Industry Act (PIA) 2021 and a series of recent Executive Orders, according to a legal analysis by Tope Adebayo LP.
The Lagos-based full-service law firm noted that while the reforms have significantly improved regulatory clarity, fiscal attractiveness, and investor confidence across the gas value chain, infrastructure deficits and implementation challenges continue to limit the pace of progress.
Nigeria holds more than 206 trillion cubic feet of proven gas reserves, the largest in Africa. Despite this abundance, however, the domestic gas market has historically struggled with underinvestment, inadequate infrastructure, gas flaring, and supply constraints affecting key sectors such as power generation and manufacturing.
According to Tope Adebayo LP, the PIA marked a major turning point by creating a more structured legal and commercial framework for gas development. “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 firm stated in a report titled From Policy to Practice: Legal and Regulatory Drivers of Nigeria’s Domestic Gas Market Under the PIA and Recent Executive Orders.
Apart from noting that a key reform under the Act is the establishment of separate regulatory authorities for upstream and midstream/downstream operations to improve oversight and reducing regulatory bottlenecks, the analysis highlighted the introduction of the Domestic Gas Delivery Obligation (DGDO) framework as one of the most significant interventions designed to increase gas supply to strategic sectors, including power generation and industry. Unlike previous arrangements, the DGDO is backed by enforceable penalties for non-compliance and clearer delivery obligations.
There are measurable improvements according to industry data cited in the report, with domestic gas sales increasing from 49,310.73 MMSCF in January 2022 to 64,206.09 MMSCF in January 2025 while gas flaring declined modestly during the same period. The report also pointed to the expansion of the Nigerian Gas Flare Commercialisation Programme, under which dozens of flare sites have been auctioned to successful bidders for gas monetisation projects.
Beyond supply measures, the PIA has introduced open-access provisions for gas infrastructure, liberalised aspects of gas pricing, and established the Midstream and Downstream Gas Infrastructure Fund (MDGIF) to support critical investments in processing, transportation, storage, and distribution infrastructure.
Recent Executive Orders and Presidential Directives have further strengthened the investment climate through tax incentives, accelerated contracting timelines, cost-efficiency measures, and more flexible local content implementation.
“These interventions signal a deliberate effort by government to improve project economics and enhance Nigeria’s competitiveness as a destination for gas investments,” Tope Adebayo LP noted.
However, the firm cautioned that legal reforms alone cannot deliver the full potential of the domestic gas market, stating: “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.”
According to the analysis, achieving a fully functional and scalable domestic gas market will require sustained investment in pipelines, processing facilities, transportation networks, and distribution systems, alongside stronger institutional coordination and consistent regulatory execution.
The report makes it clear that the foundations have been laid but long-term success will depend on effective implementation and continued market reforms, implying that to unlock the full promise of the Decade of Gas initiative, Nigeria must bridge the gap between legal design and operational reality.