Nigeria gas market surge records 30% growth as PIA reforms and executive orders boost domestic gas investment and supply performance

Nigeria’s domestic gas sector has recorded a notable expansion, with sales rising by approximately 30 per cent between January 2022 and January 2025, driven by regulatory reforms under the Petroleum Industry Act (PIA) 2021 and recent executive directives issued by President Bola Tinubu.

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The development was disclosed in a legal analysis by Lagos-based law firm Tope Adebayo LP, which said the reforms have strengthened regulatory clarity, improved fiscal attractiveness, and boosted investor confidence across the gas value chain, despite lingering infrastructure and implementation challenges.

According to the analysis, Nigeria, which holds over 206 trillion cubic feet of proven gas reserves, has historically struggled to translate its resource wealth into reliable domestic supply due to weak infrastructure, underinvestment, and persistent gas flaring.

Data cited in the report showed that domestic gas sales increased from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2 bscf in January 2025, underscoring what the firm described as early gains from ongoing policy reforms.

The Nigeria Gas Market Surge was attributed largely to these structural and regulatory changes.

The report described the Petroleum Industry Act as a transformational milestone for the sector, noting that it introduced clearer governance structures and investment incentives aimed at repositioning the industry for long-term growth.

“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 its analysis titled From Policy to Practice: Legal and Regulatory Drivers of Nigeria’s Domestic Gas Market Under the PIA and Recent Executive Orders.

The analysis highlighted the creation of separate regulatory institutions for upstream and midstream/downstream operations as a key reform that has reduced bottlenecks and improved oversight within the sector.

It also pointed to the Domestic Gas Delivery Obligation framework, designed to ensure supply to critical sectors such as power generation and industrial production.

Additional reforms include partial liberalisation of gas pricing, open access to infrastructure, and the establishment of the Midstream and Downstream Gas Infrastructure Fund to support investments in pipelines, processing, and distribution networks.

The firm further noted that executive orders and presidential directives have enhanced the investment environment by introducing tax incentives, accelerating contracting timelines, and improving local content flexibility.

“These interventions signal a deliberate effort by the government to improve project economics and enhance Nigeria’s competitiveness as a destination for gas investments,” the report stated.

However, the analysis warned that despite the positive trajectory, structural weaknesses continue to limit full market potential.

It cited infrastructure gaps, payment risks in the power sector, legacy debts, and inconsistent implementation as major constraints.

“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 firm added.

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It concluded that while foundational reforms have been established, sustained investment and stronger institutional coordination will be necessary to fully realise Nigeria’s “Decade of Gas” ambition and convert policy gains into long-term operational stability.