139 firms advance to RFP stage, compete for 48 gas production sites under 2022 commercialised gas flare programme

Oredola Adeola

The  Nigerian Upstream Petroleum Regulatory Commission, (NUPRC) has shortlisted 139 bidders for the Request for Proposal (RFP) out of a total of  300 applicants that applied for the  Statement of Qualification (SOQ) phase of the Nigerian Gas Flare Commercialisation Programme (NGFCP).

Mr. Gbenga Komolafe, NUPRC’s Chief Executive Officer made the announcement on Thursday during the Nigerian Gas Flare Commercialisation Program (NGFCP) Bidder’ conference &  Investors forum 2023 with the theme:

“Creating Value from Waste – The NGFCP as a Critical Link to Sustainability of Operations and Nigeria’s Energy Transition Journey”, held at the  Transcorp Hilton Hotel Abuja.

According to the CCE, the shortlisted bidders were qualified for the first stage of the bidding process, after meeting the criteria of the evaluation exercise conducted by the Commission in line with the RFQ published criteria.

Engr. Komolafe said that the NGFCP 2022, is first among a series of competitive auctions that flare gas that would otherwise have been flared will be put on sale by the Commission to interested entities as prospective title holders of the flare gas.

Komolafe noted that the Statement of Qualification (SOQ) phase of the bid process, was only the beginning  of the journey for the bidders and the Commission.

He revealed that the next stage would require the successful applicants to compete through a proposal reflecting demonstrable evidence for capacity to deliver on the flare monetisation projects.

Komolafe said, “This is a critical stage in the history of Nigerian petroleum industry and being a part of this journey is by no means a trifle task.

“The NGFCP checks the box in many fronts, apart from forestalling the deleterious impacts of gas flaring on the environment, the programme also hope to end the wanton destruction and wastage of our premium economic resource.

“In today’s carbon constrained world, where fossil fuel is becoming less and less popular, amidst global call for energy transition and mitigation of climate change, natural gas has assumed a stature of significant importance as the bridging fuel for many oil and gas producing nations.

“For Nigeria, as a gas nation, natural gas has been adopted as our transition fuel to drive the industrialisation of the nation’s economy in line with the expectations of the Decade of Gas initiatives launched by the government.

“Additionally, the NGFCP initiative is also targeted at creating investment and employment opportunities and encouraging increased capital inflow to the Nigerian Oil and Gas sector.,” the NUPRC’s CCE said.

He further noted that the NGFCP 2022 is first among a series of competitive auctions whereby flare gas  will be commercialised by the Commission to prospective title holders of the flare gas.

Komolafe noted that during the bidding process, prospective bidders are expected to submit bid proposals in line with the requirements and terms of the RFP, covering such areas as technical, commercial, financial, and other relevant information regarding the project that the qualified applicant intends to develop.

The proposals, according to him, will include the capacity of the bidders to  use the gas as fuel or feedstock or both for products to be disposed of in either the domestic or international markets.

Emphasising on integrity of the entire process, Komolafe affirmed that all the proposals submitted by the bidders will be judged strictly on their merits, in compliance with the criteria published in RFP document which has since been uploaded on the NGFCP portal.

The NUPRC’s boss said that at this second phase, tagged  – the Request for Proposal (RFP) phase, qualified applicants will have access to the data room for data prying and leasing, including suite of commercial agreements, for the 48 gas flare sites on offer in the NGFCP 2022.

He said, ” The precise flare sites, volumes, and compositions of gas offered will be accessed in the Data room to be made available to Qualified Applicants via the NGFCP 2022 portal upon payment of relevant fees as prescribed in the RFP.

“The Data room sessions will be held virtually to provide flexibility and comfort to all participants. Please rest assured that the Commission shall ensure an open, transparent, competitive, and non-discriminatory bidding process in line with the Provisions of Section 74 of Petroleum Industry Act (PIA) 2021.

“It is important to remark that the NGFCP 2022 is not prescriptive as regards the choice of technology, product output or destination, however, it is favourably disposed to Bidders who may consider clustering as this will indicate greater mop up of the flare gas by a proposal” Engr Komolafe revealed.

Austin Okwah, Manager, NUPRC, Legal Unit ,  in his comment said the shortlisted firms are expected to submit their proposals online and physically and must contain details of their mandatory consortium information.

Okwah said the proposals must also contain bid bonds issued by reputable banks or insurance companies.

He listed three agreements that underpinned the programme including Milestone Agreement which defined programme conceptualisation (agreement between the commission and flare gas buyer).

Others are Gas Sales Agreement which had quantity limitations and guarantees as well as Connection Agreement which required taking the gas from the flare harder to the project site and operation procedures.