The Federal Government is targeting to generate an overall inward investment of around $3 billion-$3.5 billion and a potential annual revenues/gross domestic product (GDP) impact of around $ 1 billion per annum from Gas Flare Commercialisation Programme (NGFCP).
The NGFCP could also generate approximately 300,000 direct and indirect jobs and unlock and supply around 600,000MT of Liquefied Petroleum Gas (LPG) product to 6 million homes in Nigeria.
The government has also allayed the fears being expressed about how investors participating in the NGFCP would move out gas from remote locations where they are sited because of the complexities of their terrain, even as it is optimistic that its National Gas Policy will address concerns of gas flaring.
Emmanuel Ibeh Kachikwu, minister of state for petroleum resources, made these revelations when he spoke exclusively to BusinessDay through Justice Derefaka, programme manager, Nigeria Gas Flare Commercialisation Programme (NGFCP), in the office of the minister of state for petroleum resources.
He confirmed further that third party investors are to access and utilise flared gas that is currently being sent to flare and convert same into flare-gas-to-market-products (FG-2-MP).
“As at today, over 700 investors have registered to download our issuance of request for qualification (RfQ) against the backdrop of the publications of the National Gas Flare Commercialisation Programme (NGFCP) adverts on the 26th of November, 2018 by the Federal Government calling for the expression for Expression of Interest (EoI) in the NGFCP and the issuance of request for qualification (RfQ) package to conduct the first bid round for the largest market-driven flare gas monetisation and utilisation programme,” Kachikwu said.
The NGFCP is designed as the strategy to implement the policy objectives of the Federal Government for the elimination of gas flares from Nigeria’s oil and gas fields in the near term (2-3 years), with potentially enormous multiplier and development outcomes for Nigeria.
Kachikwu said the NGFCP is also designed as the contribution of the petroleum sector to Nigeria’s intended nationally determined contributions (INDC) under the Paris agreement (COP21).
He stated further that the NGFCP is an approach to eliminate gas flaring through technically and commercially sustainable gas utilisation projects developed by competent third party investors who are to be invited in a competitive and transparent bid process.
The commercialisation approach, Kachikwu explained, has been considered from legal, technical, economic, commercial and developmental standpoints.
“It is a unique and historic opportunity to attract major investment in economically viable gas flare capture projects whilst permanently addressing a 60-year environmental problem in Nigeria,” he said.
Meanwhile, against concerns being expressed in some quarters that the gas flare sites are not accessible for would-be investors to operate from, an official of the Ministry of Petroleum Resources told BusinessDay that no company participating in the bid for the projects would be allowed to go to a place where it would find it difficult to get gas to centres where value would be added.
Some stakeholders had asked the question, “How do you move out the gas located in remote areas that are very challenging?”
The ministry official also said the type of business investors are going to do would determine the level or scope of infrastructure that would be put in place.
“If in the course of evaluation of the proposals submitted by investors, the committee responsible for that is not convinced that a particular investor has what it takes to carry out the project at a particular location, the company would be declined,” he said.
Jusitice Derefaka, programme manager, NGFCP, said as part of the Federal Government’s strategy to reposition the oil and gas industry, the Ministry of Petroleum Resources has commenced the implementation of carefully conceived initiatives to foster efficiency and attract investments along the oil and gas value chain as embedded in the “7 Big Wins – Short and Medium Term priorities to grow Nigeria’s Oil and Gas industry” launched by President Muhammad Buhari in October 2016.
“Our preliminary groundwork prior to launching the NGFCP included diverse case studies and economic analysis of various flare gas utilisation options for the country,” Derefaka said.
“And we found out that although pipelines present the most viable option for transporting gas, there are scalable, containerised, skid mounted/barge type ‘plug & play’ technologies; virtual pipeline & compressed natural gas (CNG) trucks would be preferred for security and other reasons,” he said.
According to him, these take care of the issue of remoteness of gas flare site and locations. Additionally, under the NGFCP, any preferred bidder and/or a would-be gas flare site “Permit Holder” is free to latch onto existing NNPC pipeline infrastructure.
BusinessDay findings revealed that oil and gas firms operating in the country flared a total of 282.08 billion standard cubic feet of natural gas in 2018, amounting to a potential loss of N234bn.
The firms, including international and indigenous operators, wasted 31.68 billion scf of gas in January; 27.25 billion scf in February; 26.88bn scf in March; 23.06 billion scf in April; 21.20 billion scf in May, and 21.66 billion scf in June 2018.
Olusola Bello & HARRISON EDEH, Abuja
