Old man in flat producing gas (7)
I believe the answer is:
propane
'gas' is the definition.
(I've seen this before)
'old man in flat' is the wordplay.
'old man' becomes 'pa' (both can mean father).
'in' means one lot of letters goes inside another.
'flat' becomes 'prone' (prone can mean laying flat).
'pa' going inside 'prone' is 'PROPANE'.
'producing' acts as a link.
(Other definitions for propane that I've seen before include "A hydrocarbon gas" , "Gas used as fuel" , "Bottle gas" , "gaseous fuel" , "Type of gas" .)