800 firms compete to manage gas flare sites

No fewer than 800 companies have indicated interest to manage 176 gas flare sites in Nigeria, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said.

Kachikwu said on Thursday that government had received bids of 226 firms that paid the stipulated fees out of the 800 companies that expressed interest in managing the sites.

He said that government was working hard to stop gas flaring in the country by the year 2020, 10 years ahead of United Nation’s deadline.

“Over 800 companies have expressed interest to manage about 176 gas flare sites and out of the total companies, about 226 have paid the stipulated fees and their bids had been received,” he said.

He said that it was unfortunate that Nigeria had over the years failed to properly utilize its gas resources for the development of the economy.

According to him, the country is yet to use the tonnes of gas resources it has to achieve industrialisation and agricultural development, especially through fertilizer production.

He decried the practice of flaring a significant volume of gas produced in the country, thus depriving Nigeria the benefits that could have been accrued from the resources.

“Premised on the foregoing, the policy position of His Excellency, President Muhammad Buhari, is that gas flaring is totally unacceptable.

“In this regard, the Federal Government of Nigeria, initiated a number of actions to reaffirm its commitment to ending the practice of gas flaring in our oil fields.

“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 in June 2016, approved the Nigerian Gas Flare Commercialisation Programme, NGFCP,” he said.

The minister explained that the NGFCP was a key component of the National Gas Policy, which sought to end gas flaring, create an enabling environment for investors, seek value addition for gas and improve governance in the sector.

He further stated that the NGCFP would ensure zero gas flare by 2020.
“We must stop gas flare and other hazards associated with gas flaring in Nigeria. We must also ensure that oil and gas production do not become harmful to our citizens,” he added.

He assured that government would work to grant open access to all pipelines and other essential midstream infrastructure, with respect to pricing of gas for the domestic market, which was largely controlled by the federal government under a transitional pricing framework.

He added that the current framework would be retained for a limited period until a sufficient gas market is established.

“The policy objective is to move to market-led wholesale gas pricing without gas price regulation, except where there are natural monopolies,” Kachikwu noted.

Also, Chairman of the Ministerial Steering Committee of the NGFCP, Mr Rabiu Suleiman, said the committee shall endeavor to recommend the best governance structure prior to the Department of Petroleum Resources (DPR) carrying on with the programme as a statutory function immediately after the first auction rounds.

He noted that the NGFCP was designed as a strategy to implement the policy objectives of the Federal government for the elimination of gas flares with potentially enormous multiplier and development outcomes for Nigeria.

According to him, the objective of the NGFCP is to achieve the gas flare-out commitment through technically and commercially sustainable gas utilisation projects developed by competent third party investors who will be invited to participate in a competitive and transparent bid process.

Listing the benefits of the project, he said, “Overall, the NGFCP potential GDP impact is estimated at approximately $1 billion per annum. Assuming average project sizes in the range of $10-40 million, the NGFCP has a potential of triggering around 70 to 89 projects.

“And over a 1 – 2 year period, the NGFCP could generate approximately 300,000 direct and indirect jobs.

“Provide six million households with clean energy, particularly in unlocking LPG (cooking gas i.e. produce 600,000 metric tonnes, MT, of LPG per year).

Once operational, projects launched under the NCFCP would reduce Nigeria’s emissions by approximately 13 million tons of CO2 per year.”