The Nigerian Gas Flare Commercialisation Programme (NGFCP) has attracted over 700 applications, Justice Derefaka, programme manager, has said.
The NGFCP is an ambitious plan to sell over 700 million standard cubic feet of gas a day flared at 178 different sites in the country, roughly the same amount of gas used in generating grid power.
Approved in 2016 by the Federal Government, the NGFCP seeks to achieve government’s target of eliminating gas flaring in the Niger Delta by 2020. The Petroleum Act of 1969 and the Flare Gas (Prevention of Waste and Pollution) Regulations 2018, signed in July 2018, provide the basis for the NGFCP.
Based on the right of the Federal Government under the Petroleum Act to take gas at the flare free of cost, the NGFCP was launched by the Ministry of Petroleum Resources. It is designed to offer a series of auction rounds, wherein the Federal Government takes the flare gas at the site and auctions it to third parties for sale.
Derefaka also said that the first bid round will be concluded on February 28 after which all the applications would be evaluated to prequalify competent investors in March. Preferred bidders would be unveiled in August this year.
In a note sent to journalists, Derefaka also said that Rabiu Suleiman has been appointed as the new NGFCP chairman. Rabiu is also the group executive director, NNPC/senior technical adviser, Refineries, Gas, Power and Downstream Infrastructure in the office of the minister of state for Petroleum Resources.
Interested applicants start with a Request For Qualification (RFQ). Those who submit Statements of Qualification (SOQs) and are deemed qualified by the programme are then invited to respond to the Request for Proposals (RFP) that will be subsequently issued by the government.
Applicants who are invited to respond to a Request for Proposals will pay $2,000 to the Department of Petroleum Resources (DPR), the upstream regulator, to gain access to gas flare data and an additional $1,000 as data leasing fee before they can download details of any flare site.
According to the NGFCP, Nigeria loses approximately $1 billion of revenue through gas flaring due to its inability to capture and sell flared gas in the country.
So, the programme seeks to stop this waste while creating value to the local economy by creating new 300,000 jobs, producing 600,000 MT of liquefied petroleum gas (LPG) per year and generating 2.5GW of power from new and existing Independent Power Plants (IPPs).
But Nigeria will need $3.5 billion worth of inward investments into gas capture technologies to achieve its flare gas commercialisation targets by 2020.
One investor who submitted an application told BusinessDay that he is talking to investors about setting up a small gas plant to serve the community in the field he is interested in.
Under the programme, investors reach an agreement with the producer of the field, build a one-metre flare connector which traps the gas and is used for various purposes either as a fertiliser plant or to generate power for the community.
The NNPC recently said that between 2006 and 2016, Nigeria cut gas flare by 26 percent. However, the country still flares 10 percent of gas produced from its fields in the Niger Delta. It is the world’s seventh-biggest gas-flaring country behind Russia, Iraq, Iran, the United States, Venezuela and Algeria.
ISAAC ANYAOGU
