Critical Appraisal of the Legal Framework for the Development and Utilization of Natural Gas in Nigeria

Abstract

Gas utilization in Nigeria is a crucial aspect of the country's energy sector. However, the country 
has faced challenges in fully exploiting its gas reserves due to the absence of a comprehensive legal 
framework that specifically addresses gas utilization, and its environmental impact, thus 
hampering full harnessing of this huge resource. In recent times, the legal framework for gas 
utilization in Nigeria has undergone a revolution with the enactment of the Petroleum Industry Act, 
2021 and Regulations such as the Midstream Gas Flare Regulations, 2023 among others which also 
heralded the introduction of attractive fiscal terms for gas projects. With the use of the doctrinal 
method of research, the paper assessed the strengths and weaknesses of the existing legal 
framework, and identified salient areas that require reforms, in order to encourage effective 
utilization of the country's gas resource. The paper argues that though the current legal framework 
for gas utilization is a step in the right direction, it however is still characterized by shortcomings. 
This paper finds that the exemption provision under s.107 of the PIA appears to encourage or 
legalize routine flaring, thus creating a loophole capable of being exploited by multinational 
companies who would rather flare gas than utilize or commercialize same; and that the EIA Act 
remains ineffective as developments that are clearly detrimental to the environment continue 
taking place. The paper recommends the PIA Act should be reformed to completely prohibit 
routine flaring, and the EIA Act should be amended to allow for thorough and more transparent 
assessment of environmental impact of utilization projects.