Nigeria’s Gas Market Sees Notable Growth Amid Regulatory Reforms
According to a legal analysis by Tope Adebayo LP, Nigeria’s domestic gas market has experienced a remarkable sales increase of approximately 30% from January 2022 to January 2025. This growth is largely attributed to the reforms introduced under the Petroleum Industry Act (PIA) of 2021 and a recent executive order by President Bola Tinubu.
Reforms Enhance Investor Confidence
The Lagos-based law firm has indicated that these reforms have significantly improved regulatory clarity, financial appeal, and investor confidence throughout the gas value chain. However, ongoing infrastructure deficiencies and implementation hurdles continue to impede the sector’s growth trajectory.
Challenges in Converting Resources to Energy Supply
Despite possessing proven gas reserves exceeding 206 trillion cubic feet, Nigeria has faced persistent challenges in transforming its resource base into reliable domestic energy supplies. Factors such as insufficient investment, underdeveloped infrastructure, and the ongoing issue of gas flaring have hindered progress.
Positive Trends in Domestic Gas Sales
The report highlights data showing domestic gas sales rising from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2 bscf in January 2025. This increase is a clear reflection of the ongoing reforms under the PIA.
A Turning Point for the Sector
The analysis emphasizes that the PIA signifies a pivotal moment for Nigeria’s gas sector. The law is described as the most comprehensive reform in recent decades, laying a stronger groundwork for domestic gas development through improvements in regulatory clarity, price liberalization, infrastructure support, and enhanced investment incentives.
Framework for Supply Expansion
The structural reforms established by the PIA, including the creation of distinct regulatory bodies for upstream and midstream/downstream operations, have facilitated better oversight and diminished regulatory bottlenecks. The report points out that the domestic gas supply obligation framework is an essential initiative aimed at boosting supply to key sectors like power generation and industry, featuring enforceable penalties for non-compliance.
Investment Climate Strengthened
The law firm also notes that recent executive orders have further optimized the investment landscape by offering tax incentives, reducing contracting timelines, and introducing more flexible local content requirements. These measures are seen as part of the government’s strategic initiative to enhance project economics and position Nigeria as a competitive gas investment destination.
Need for Ongoing Investment and Structural Coordination
Despite these positive developments, Tope Adebayo LP cautions that achieving the market’s full potential requires more than just policy changes. The firm warns that significant roadblocks—such as infrastructure deficits, payment risks in the power sector, legacy debt issues, and implementation inefficiencies—continue to constrain large-scale growth. To fully realize the potential of its Decade of Gas initiative, Nigeria must align its legal frameworks with operational realities and ensure sustained investment in vital infrastructure.
