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Nigeria’s gas potential is unparalleled. It holds the seventh largest gas resources in the world with around 187 TCF of proven high quality gas reserves. Nigeria is often described as a gas province with some oil in it. The potential for additional gas reserves is as high 600TCF, according to a variety of sources. However, despite this potential, the reality on the ground is inconsistent with expectations, the Nigerian domestic economy has not benefited proportionately from the gas resource. For example, despite being the largest producer of LPG in the region, Nigeria’s per capita consumption is lowest in the region. LPG is scarce and prices are about the highest in the world. This is inconsistent with the picture of very rich gas in Nigeria’s portfolio. About 1.5GW of thermal power plants are currently idle for lack of gas. Many potential investors in gas-based industries like fertilizer, methanol, etc, are frustrated and unable to progress investment as their quest to sign supply contracts for over four to five years has yielded no positive results. Oftentimes, lack of clarity as to where to go get gas commitment has been a major problem. This observation is clearly at variance with expectations from a country that is not industrialised and should be most receptive to investors. Reasons for the above anomaly are many, and include: Structure of the industry: The Nigerian gas sector is oligopolistic. Production of gas is concentrated in the hands of a few IOC majors, most of which are export-focussed. Poor infrastructure: Over the years, infrastructure development has been project-based (point to point), and lacks the scalability and flexibility to respond to aggressive demand growth. While gas reserves are concentrated in the east and markets are concentrated in the west, there is no link between the east and west as well as no penetration to the north. Poor infrastructure prevents effective gas swapping to take place across players creating an illiquid gas market. Sub-commercial Domestic Gas Market: Low gas prices, few credible buyers, legacy of poor payment performance among the most dominant domestic gas buyers domestically, legacy of failed domestic projects such as NAFCON, ALSCON, etc. all of which were in the past supported by big investments in gas supply, poor or no bankable gas supply agreements, hence no credible commercial framework to support major investment in gas supply, general lack of confidence in the domestic reforms, all of these have contributed to low supply development and ability to deliver available gas. The Nigerian gas master plan initiative is aimed at addressing many of these imbalances in a rapid but sustainable manner. David Ige is the group general manager/STA, group managing director, NNPC.