The policy was passed in last week's cabinet session but only made public on Wednesday.
Nigeria has for decades relied on its ample supplies of oil to power its economy. But despite having a wealth of crude, the vast majority was sent overseas for refining, and the country instead has had to import refined fuels at great expense.
Nigeria has the world's ninth largest proven gas reserves, at 187 Tcf. A move to using gas could reduce the drain on foreign exchange that importing refined oil products requires.
If coupled with infrastructure investment, Nigeria could also improve its creaking power grid, which forces many with no power or those plagued by frequent blackouts to operate costly generators.
The 100-page National Gas Policy seeks to set up a single independent petroleum regulator.
It also aims to separate upstream from midstream operations and to separate gas infrastructure ownership and operations from gas trading, the oil ministry said.
The policy will also divide the Nigeria Gas Company into separate transport and gas marketing companies and introduce "market-led wholesale gas pricing" after a transitional period.
