Examining the Legal and Regulatory Framework for Domestic Gas Utilization and Power Generation in Nigeria

While the regulatory and institutional reforms in the Nigerian electricity sector, as envisaged under the National Electric Power Policy 2001 and the Nigerian Electric Power Sector Reform Act 2005, appear to be on a steady path, the reforms in the petroleum industry, as envisaged under the National Oil and Gas Policy 2004 and the Petroleum Industry Bill, has remained in a mire of uncertainty, especially with regards to their conclusions and overall implementation. The effects of the uncertainty and the consequential lingering disequilibrium between the gas and electricity sectors, has critical implications for investments, infrastructure development and the overall gas supply to power outlook. The electricity sector reforms are largely dependent on the availability, affordability and reliability of domestic gas supply to over 70% of installed national power generation capacity. The regular shortages in gas supply to power electricity generation in Nigeria can be directly or indirectly linked to the regulatory inefficiency of the existing regulatory framework in domestic gas supply. Thus, while power sector assets are being privatized and liberalization is introduced in the medium to long term, it is essential to ensure that the parallel development of the appropriate regulatory framework is established for the domestic gas sector. Such a regulatory framework is required to create the required commercial environment where investments in gas supply infrastructure thrive. The aim of this article is to examine the existing and proposed laws, policies and regulations in relation to domestic gas supply in Nigeria as they affect power generation and the realization of identified economic and policy objectives