The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said that 139 companies have been awarded qualified applicant status under the Nigerian Gas Flare Commercialization Programme (NGFCP).
This followed the restructuring of the gas flare commercialisation programme initiative of the federal government by the NUPRC.
The commission also said 300 companies initially registered their interest to revalidate their pre-qualification status and submit Statements of Qualification (SOQs) as existing bidders and new participants, respectively.
According to the regulator, the qualified applicant status marks the end of the Request for Qualification (RFQ) phase of the NGFCP 2022, in line with the accelerated delivery schedule.
The restructuring: In a recent announcement, the commission’s chief executive officer, Gbenga Komolafe said after the Petroleum Industry Act (PIA) was passed into law in 2021, a section of the Act required a restructuring of the NGFCP. Part of the statement said:
“The NGFCP was restructured for enhanced value to investors, following an in-depth assessment of the current industry gas flaring situation and prevailing operational realities, coupled with changes in the socio-economic landscape since the NGFCP was initially conceived. Consequently, the Request for Qualification (RFQ) was issued to enable interested parties to register their interest to participate in the Programme.”
The backstory: The NGFCP was first established on December 13, 2016, when the federal government decided to harness Nigeria’s flare gas for productive use through third parties. As of 2016, Nigeria flared 800 million standard cubic feet per day (MMscf/pd) of associated gas.
As a result of this, the country was losing $850 million worth of revenue potential to gas flaring as well as a loss of $400 million in carbon credit value.
Following the end of the request for qualification phase with 139 qualified applicants, the commission will begin the request for proposal phase.
In case you missed it: NUPRC has made progress with the NGFCP restructuring. However, the commission has missed the December 2022 deadline it gave in October 2022 for announcing the winners under the renewed initiative.
Nairametrics reported in October 2022 that the commission’s chief executive officer, Gbenga Komolafe announced that Nigeria will award contracts for its flared gas by the end of December to harness gas. At the time, he stated:
“The auction is being restarted and would be open to previous applicants and new bidders. The auction process has been streamlined to enable an accelerated delivery schedule for this exercise with the announcement of winners planned for December 2022.”
At the time, an analyst told Nairametrics that the possibility of the Buhari administration ending gas flaring by December 2022 was slim given some reasons – distractions from the forthcoming February 2023 elections, cost and market factors.
The analyst, however, noted that the outgoing Buhari administration could set a foundation for the incoming administration to build on what has been done already.