Gas Flaring: FG to Hand over Sites to Investors by 2020

Stories by Chineme Okafor in Abuja
Investors who get the nod of the federal government to capture and commercialise flared gas in the ongoing Nigerian Gas Flare Commercialisation Programme (NGFCP) will be handed over their preferred flare sites by May 2020, a timeline of the programme has disclosed.

According to the timetable shared by the NGFCP Programme Manager, Mr. Justice Derefaka, at the 2019 edition of the annual Society of Petroleum Engineers (SPE) Olobiri Lecture Series and Energy Forum (OLEF) in Abuja, the government hopes to conclude the distribution of the about 178 flare sites to investors by then, after which implementation of their business plans would commence.

Between the period leading to the award of permit to access flare sites, the government would appoint international lawyers for the programme; hold a bidders’ conference; issue Request for Proposal (RfP) as well as open the gas flare data room to qualified applicants, evaluate investors’ proposals, make award to preferred bidders and then execute commercial agreements with them.

Recently, the government disclosed that it would put out a total of 178 gas flaring sites it had so far identified, to be commercially acquired by investors under the programme. This would be through a competitive bidding process which would include the issuance of a permit to access flare gas to successful bidders, as well as rights to permit holders to exclusively off-take such quantities of flare gas at one or more sites, for use in an approved commercial gas project.
It also said it was expecting $3.5 billion worth of inward investments by the third party investors to drive the programme and achieve its targets of ending gas flare in Nigeria by 2020.

Similarly, Derefaka, explained that the NGFCP expects that if gas from about 50 top flare sites in the country are accessed by investors in the programme, Nigeria could reduce the volume currently flared by 80 per cent.

“Harnessing gas from the top 50 flare points would reduce volume of flared gas by 80 per cent, given 2015 gas flare locations and volumes as the baseline; over 178 flare points collectively flare about 1 billion standard feet of gas; majority of the gas flaring locations (about 65 per cent of them) are onshore; at least 80 per cent of gas from the flaring locations can be viably utilized,” said Derefaka.

He added that although pipelines present the most viable option for transporting gas from flaring sites, scalable, containerised, skid mounted or barge type ‘plug and play’ technologies, virtual pipeline and compressed natural gas trucks, would however be preferred for security and other reasons.

According to him, despite the drop in gas flaring by well over 70 per cent in the country over the past decade, Nigeria still flared about one billion cubic feet of it in 2017, exceeding the equivalent of 800 metric million standard feet per day (mmscfd) utilised for power generation and equivalent of 450mmscfd utilised in the domestic industry.
Turning to the health implications of gas flaring in local communities in Nigeria, Derefaka said: “17 onshore gas flare points in Bayelsa state are estimated to cause 120,000 asthma attacks, 4,960 respiratory illnesses among children and 49 premature deaths per year in the region.”

He noted that government’s political to end gas flare were strongly backed by its declared commitment to end the menace by 2020; Nigeria’s membership of the Global Gas Flare Reduction Partnership (GGFR) and the Zero Routine Flaring (ZRF) Initiative; approval of the NGFCP by the Federal Executive Council (FEC) in 2016; Nigeria as a signatory country to the United Nations Framework Agreement for Climate Change (UNFCCC) with a commitment to make Intended Nationally Determined Contributions (INDC) for the reduction of greenhouse gas emissions (GHGs); ratification of the UNFCC by President Muhammadu Buhari in May, 2017; as well as the FEC’s approval of the National Gas Policy in June, 2017, in addition to gas flare out being a component of the Economic Recovery and Growth Plan (ERGP) of the government.