The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Tuesday announced the outcome of the bidding exercise for the Nigerian gas flare commercialisation programme.
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.
The government said 226 companies submitted bids before the project was suspended at the onset of the COVID-19 pandemic in 2020.
Last October, the government announced the relaunch of the programme and opened bids.
In a statement signed by its management on Tuesday, the NUPRC announced the issuance of letters of award to 42 companies/entities deemed successful in the keenly contested bid for 49 flare sites put forward during the 2022 Nigerian Gas Flare Commercialisation Programme (NGFCP) auction process.
It said thirty-eight of the companies have been awarded forty flare sites for standalone single flare site development, while four are awarded nine sites to be developed as clusters.
“Reserve bidders’ status has also been accorded to some companies for the corresponding flare sites in case the preferred bidders fail to meet the terms and conditions stipulated in the RFP,” the commission said.
The commission indicated that award letters are already being transmitted to the respective successful entities through the appropriate channels.
In furtherance of its mandate in Section 7 (e) and Section 105 (2) of the Petroleum Industry Act (PIA), 2021, the statement said, the commission, in the third quarter of 2022, restructured the NGFCP and re-launched the programme to align with the provisions of the PIA, as well as reflect prevailing economic and operational realities.
The Commission noted that the significant success recorded in the NGFCP bid process was due to a series of focused engagements with relevant stakeholders including domestic investors, international development agencies, oil and gas producers, technology providers and financial institutions during the intervening months.
It said the engagements by the Commission were to galvanise and sustain interest in the programme, attract investments and stimulate participation by local and foreign entities.
“In response to the Request for Qualification (RFQ) issued in the fourth quarter of 2022, three hundred companies/entities indicated interest in either revalidating their prequalification status as existing participants or submitting a Statement of Qualification (SOQ) as new participants,” it said.
Following the evaluation of SOQs, the commission said a total of one hundred and thirty-nine (139) applicants were deemed successful and awarded the Qualified Applicant status.
Subsequently, it said in the first quarter of 2023, the Commission issued the Request for Proposal (RFP) to enable qualified applicants to put together their respective proposals for any of the forty-nine flare sites on offer.
“Eighty-eight entities, comprising individual companies and consortiums responded to the RFP and submitted a total of one hundred and thirty-seven (137) proposals, each containing technical, commercial and financial documentation for one or more of the forty-nine (49) flare sites for either standalone or cluster development.
“The proposals were duly evaluated by the Commission and approval was secured to announce 38 companies/entities as successful bidders for forty (40) sites for standalone single flare site developments and four (4) companies/entities for nine (9) sites to be developed as clusters,” it said.
Some companies were also awarded reserve bidders status for the corresponding flare sites in case the preferred bidders failed to meet the terms and conditions contained in the RFP.
At this stage, the statement said, 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.
“KPMG, a global network of professional firms, has been approved to partner with the commission in the implementation of the award to ensure the successful outcome of the gas flare-out commercialization process,” it said.
The NUPRC urged successful bidders to follow through with the final stages of the programme towards becoming permit holders and executors of viable projects that would harness flared gas for value creation.
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