The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced the results of the Nigerian gas flare commercialisation program bidding exercise.
In 2016, the Nigerian government initiated the National Gas Flare Commercialisation Program to involve third-party investors in utilizing gas released during oil production, aiming to eliminate routine gas flaring by 2035 and achieve net-zero emissions by 2060.
According to the NUPRC, 226 companies submitted bids before the project was halted due to the COVID-19 pandemic in 2020. In October of the previous year, the government relaunched the program and accepted bids.
The NUPRC, in a statement, disclosed that it had awarded letters of award to 42 successful companies/entities out of the competitive bidding process for 49 flare sites during the 2022 Nigerian Gas Flare Commercialisation Program (NGFCP) auction. Thirty-eight companies received awards for standalone single flare site development, while four were granted nine sites to be developed as clusters. The commission also mentioned that reserve bidder status had been assigned to certain companies for corresponding flare sites in case the preferred bidders couldn’t meet the stipulated terms and conditions.
The NUPRC stated that it was already dispatching award letters to the successful entities. In line with the provisions of the Petroleum Industry Act (PIA) of 2021, the commission had restructured the NGFCP and relaunched it in the third quarter of 2022, taking into account current economic and operational factors.
The commission credited the success of the NGFCP bid process to focused engagements with various stakeholders, including domestic and international investors, development agencies, oil and gas producers, technology providers, and financial institutions.
Following the Request for Qualification (RFQ) issued in the fourth quarter of 2022, the commission noted that 300 companies/entities expressed interest in participating. After evaluating Statements of Qualification (SOQs), 139 applicants were awarded Qualified Applicant status.
In the first quarter of 2023, the Commission issued a Request for Proposal (RFP), receiving responses from 88 entities, both individual companies and consortiums, submitting 137 proposals for one or more of the 49 flare sites. After evaluation, 38 companies/entities were selected for standalone single flare site development, and 4 were chosen for cluster development.
The statement mentioned that some companies received reserve bidder status for corresponding flare sites, providing a backup option. Preferred bidders will now proceed to execute commercial agreements and make prescribed award fee payments to obtain a Permit to Access Flare Gas from the commission.
KPMG, a global network of professional firms, will collaborate with the commission in implementing the award to ensure the success of the gas flare commercialization process.
The NUPRC encouraged successful bidders to continue with the program’s final stages to become permit holders and implement projects that harness flared gas for value creation.
