Nigerian Government grants 42 bidders gas flare commercialisation licences
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced 42 successful bidders in the 2022 Nigerian Gas Flare Commercialisation Programme auction process.
NUPRC chief executive Gbenga Komolafe disclosed the outcome of the bidding exercise in a statement on Wednesday.
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The Nigerian government launched the National Gas Flare Commercialisation Programme in 2016 to involve third-party investors or off-takers in harnessing gas released as a byproduct of oil production.
The programme was one of the government’s initiatives to drive the attainment of zero routine gas flaring by 2035 and net zero emissions by 2060 in the country.
Mr Komolafe said the 42 successful entities in the keenly contested bid for 49 flare sites were already issued with letters of award.
The NUPRC boss said 38 entities had been awarded 40 flare sites for stand-alone single flare site development, while four were awarded nine sites to be developed as clusters.
“Reserve bidders’ status has also been accorded some companies for the corresponding flare sites in case the preferred bidders fail to meet the terms and conditions stipulated in the request for proposal,” said Mr Komolafe. “Award letters are already being transmitted to the respective successful entities through the appropriate channels. At this stage, the preferred bidders would individually proceed to execute the suite of commercial agreements with relevant parties and effect payment of the prescribed award fees to enable the grant of permit to access flare gas by the commission.”
Mr Komolafe said KPMG, a global network of professional firms, had been approved to partner with NUPRC in implementing the award to ensure the successful outcome of the gas flare-out commercialisation process.
The NUPRC chief recalled that in furtherance of the commission’s mandate in sections 7 (e) and 105 (2) of the Petroleum Industry Act, 2021, the NGFCP was restructured, and the programme re-launched in the third quarter of 2022.
According to him, the restructuring was to align with the provisions of the PIA and reflect prevailing economic and operational realities. Mr Komolafe said the significant successes in the NGFCP bid process were due to a series of focused engagements with relevant stakeholders.
During the intervening months, Mr Komolafe said the stakeholders included domestic investors, international development agencies, oil and gas producers, technology providers and financial institutions.
He added that the engagements by the commission were to galvanise and sustain interest in the programme, attract investments and stimulate participation by local and foreign entities.
Tracing the processes leading to the award, Mr Komolafe said 300 entities indicated interest in response to the request for qualification issued in the fourth quarter of 2022.
The NUPRC chief said following the evaluation of their statement of qualification, a total of 139 applicants were deemed successful and awarded the qualified applicant status, “subsequently, in the first quarter of 2023, the commission issued the RFP to enable qualified applicants to put together their respective proposals for any of the 49 flare sites on offer.”
Mr Komolafe added, “Eighty-eight entities, comprising individual companies and consortiums, responded to the RFP and submitted a total of 137 proposals, each containing technical, commercial and financial documentation for one or more of the 49 flare sites for either stand-alone or cluster development.”
NAN/MTO
