He Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Tuesday announced the result of the bidding exercise for Nigeria’s gas flare commercialization programme.
The Nigerian government launched the National Flared Gas Commercialization Program in 2016 to engage third-party investors or buyers in harnessing the gas released as a by-product of oil production.
The program was one of the government’s initiatives to drive the achievement of zero routine gas flaring by 2035 and zero net emissions by 2060 in the country.
The government said 226 companies submitted bids before the project was suspended at the start of the COVID-19 pandemic in 2020.
Last October, the government announced the relaunch of the program and opened offers.
In a statement signed by its management on Tuesday, the NUPRC announced the issuance of award letters to 42 companies/entities deemed successful in the highly disputed bid for 49 flaring sites submitted during the Gas Flaring Commercialization Program auction process. of Nigeria (NGFCP) 2022. .
He said thirty-eight of the companies have been allotted forty burn sites for independent development of a single burn site, while four have been allotted nine sites to be developed as groups.
“Some companies have also been granted reserve bidder status for the corresponding burn sites in case the preferred bidders do not meet the terms and conditions stipulated in the RFP,” the commission said.
The commission indicated that the award letters are already being transmitted to the respective winning entities through the appropriate channels.
In pursuance of its mandate under 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 relaunched the program 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 tender 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.
He said the Commission’s commitments were aimed at galvanizing and sustaining interest in the programme, attracting investment and stimulating the participation of 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 revalidating their prequalification status as existing participants or submitting a Statement of Qualification (SOQ) as new participants,” it said.
Upon evaluation of the SOQs, the commission said a total of one hundred and thirty-nine (139) applicants were deemed successful and were granted Qualified Applicant status.
Subsequently, he said, in the first quarter of 2023, the Commission issued the Request for Proposal (RFP) to allow qualified applicants to prepare their respective proposals for any of the forty-nine burn sites offered.
“Eighty-eight entities, comprised of individual companies and consortia, 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-eight nine (49) burn sites for independent or group development.
“The proposals were duly evaluated by the Commission and approval was obtained to announce 38 companies/entities as selected bidders for forty (40) sites for independent single flare site developments and four (4) companies/entities for nine (9) sites that were developed as groups,” he said.
Some companies were also granted reserve bidder status for the applicable burn sites in the event that the preferred bidders did not comply with the terms and conditions contained in the RFP.
At this stage, according to the statement, the preferred bidders would individually proceed to execute the set of commercial agreements with the relevant parties and make payment of the prescribed award fees to enable the commission to grant the Flare Gas Access Permit.
“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 flared gas commercialization process,” it said.
The NUPRC urged the selected bidders to move forward with the final stages of the program to become permit holders and implementers of viable projects that would harness the flared gas for value creation.