The NGFCP is a special programme domiciled in the Minister of State for Petroleum. It was established to implement the National Gas Policy commitment for stricter regulation of flaring
A recent declaration by the Senate President, Dr. Bukola Saraki, that Nigeria accounts for 40 percent of flared gas annually in Africa amounting to about $7 billion in wasted opportunities calls for the urgent need for the National Assembly to expedite action on the Gas Flaring (Prohibition) Bill 2017.
More worrisome was the fact that, despite a 70 percent reduction, Nigeria recorded a further setback in its fight against gas flaring as 324 billion standard cubic feet of gas was reported to have been flared in 2017 representing 888 million scf of gas daily.
The upper legislative chamber has, therefore, set in motion a machinery to review the 39-year-old law which recommends only N10 as fine for gas flaring.
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Saraki had while declaring open a public hearing on Gas Flaring (Prohibition) Bill 2017, noted that gas-flaring remained a matter of great national embarrassment to the country.
But, beyond slamming penalties on companies involved in gas flaring, the Federal Government in its wisdom has decided to convert the monumental waste of natural resources to wealth through the implementation of the Nigerian Gas Flare Commercialisation Programme (NGFCP) which is a component of the 7-Big Wins of the Ministry of Petroleum Resources.
Specifically, the Federal Government has ratified the Paris Climate Change Agreement, and recently became a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030 whilst committing to a national flare-out target by year 2020.
Furthermore, in recognition that flared gas could be harnessed to stimulate economic growth, drive investments and provide jobs in oil producing communities and indeed for Nigerians through the utilisation of widely available innovative technologies, the Federal Executive Council (FEC) approved the NGFCP. This programme was launched by the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, on December 13, 2016.
The NGFCP is a special programme domiciled in the Minister of State for Petroleum. It was established to implement the National Gas Policy commitment for stricter regulation of flaring, the “7 Big Wins” (www.7bigwins.com) and a pathway to ultimate flare-out.
Economic gains, loss of gas flare
According to the Senior Technical Adviser on Upstream and Gas Policy to the Minister of State for Petroleum Resources and Chairman, Steering Committee, NGFCP, Mr.Gbite Adeniji, about $3.5 billion worth of investments is required to achieve the gas flare commercialisation targets by 2020.
The analysis also shows that with these investments pumped in to implement the NGFCP, huge social and economic benefits would accrue to host communities in gas-rich regions of the Niger Delta, investors and the national economy as a whole.
Benefits would include curbing pollution in local communities and providing households with clean energy, particularly LPG (cooking gas), small and medium scale businesses, employment and jobs creation, alleviating social unrest, increased Mega Watts (MW) of electric power generation potential through gas- to-power, amongst others.
The Programme Manager, NGF- CP, Ministry of Petroleum Resources, Justice Derefaka, disclosed that Nigeria loses approximately $1 billion of revenue through gas flaring, due to its inability to capture and commercialise flared gas in the country.
He further stated that if flared gas is properly exploited, it has the potential to create 300,000 jobs, produce 600,000 MT of LPG per year and generate 2.5 GW of power from new and existing IPPs, as approximately 700mmscf/d is flared at 178 flare sites in Nigeria.
On behalf of the Federal Government, the programme seeks to attract investments and develop a transparent market mechanism through a competitive procurement process for allocating gas flares, under clear and transparent criteria, to competent third party investors using proven technologies in commercial application globally. NGFCP is an opportunity for Government, industry, State governments, ethnic nationalities, and local communities to work together to resolve an oil field unacceptable practice.
What NGFCP seeks to achieve
According to Gbite, the commercialisation of flared gas for supply into the domestic market is a high priority strategy for the government in achieving the national mandate for flare-out by 2020, plus. He noted that government will take measures to ensure that flare capture and utilisation projects are developed, and will work collaboratively with industry, development partners, providers of flare-capture technologies and third party investors.
Others are; open an industry consultation mechanism, as an important measure in ensuring flaring targets are feasible and regulations are realistic, maximise utilisation of associated gas to be treated for supply to power generation or industry.
Increase the gas flaring penalty to an appropriate level sufficient to de-incentivise the practice of gas flaring whilst introducing other measures to encourage efficient gas utilisation.
NGFCP bidding process
One of the fundamental objectives of the NGFCP is to develop a transparent market mechanism through a competi- tive procurement process for allocating gas flares, under clear criteria, to competent third party investors using proven technologies. The bidding process is carried out using a two-stage procurement process. The First Stage of the biding process is the Request for Qualification (‘‘RFQ’’) package which will be available to Applicants (i.e. those parties which have registered with the NGFCP through the NGFCP Portal; www.ngfcp.gov.ng. Response to this RFQ package requirements is the submission of a Statement of Qualification.
Qualified Applicants will then be invited to proceed to the Second Stage of the bidding process where they will be requested to submit a detailed proposal which must be in conformity with the Request for Proposal (‘‘RFP’’) package requirements.
Request for Proposal
QAs will be required to sign a Confidentiality Agreement supported with a Power of Attorney and, following Department of Petroleum Resources data access protocols, pay the corresponding “prying” and “leasing” fees to obtain access to the RFP package from the NGFCP Portal (no further administrative charges apply).