Business Hilights
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NGFCP boss in US, rolls out incentives for prospective investors

On the recommendation of the United State authorities in Nigeria, an invitation was sent to the Program Manager, Nigerian Gas Flare Commercialization Programme (NGFCP), Mr Justice Derefaka to address a massive convergence of oil and gas players and investors in a summit in Texas, United State.

Addressing participants, Derefaka opened up on the policy position of President Muhammad Buhari on gas flaring which is drive effective commitment tailored at ending the practice of gas flaring in oil fields through the NGFCP.

He made it clear before the US investors that the NGFCP is the contribution of the petroleum sector to Nigeria’s Intended Nationally Determined Contributions (INDC), saying “To eliminate gas flaring through technically and commercially sustainable gas utilization projects developed by competent third-party investors who have been invited to participate in a competitive and transparent bid process. The commercialization approach has been considered from legal, technical, economic, commercial and developmental standpoints. Hence it is a unique and historic opportunity to attract major investment in economically viable gas flare capture projects whilst permanently addressing a 60 year environmental problem in Nigeria.”

“By our design, third party investors are to access and utilize flared gas that is currently being sent to flare and convert into Flare-Gas-to-Market-Products (FG-2-MP) & demonstrate project development experience and proven technology in commercial application. A structure has been devised to provide project bankability for the Flare Gas Buyers, which is essential to the success of the Programme.

“Consistent with Nigeria’s commitments for reduction of GHG, the Program would reduce Nigeria’s CO2 emissions by approximately 13 million tons/year, which could be monetized under an emission credits/carbon sale programme.

Gas Flare 77
Gas; flaring away fortunes in Nigeria

“The NGFCP is the first market driven program undertaken on this scale globally – Bidders will have flexibility of choosing which flare site(s) to bid for, the flare gas price to offer to the FGN (taking into cognizance the NGFCP floor price of US$0.25cents per thousand standard cubic square feet of gas – cheapest in the world) and the end market gas products (FG-2-MP), as well as the technology (FG-2-MT) to be deployed/Used.

Derefaka further presented diagnostics of the Gas Flare Situation in Nigeria and major highlights from the economic analysis which established amongst others that harnessing gas from the biggest 50 flare points would reduce flare gas volumes by 80%, considering the 2015 identified gas flare locations and volumes as the baseline; over 178 flare sites collectively flare about 330 bscf of gas produced per year; the majority of the gas flaring locations (about 65% of them) are onshore; at least 80% of gas from the flaring locations can be viably utilized.

gas flaring
Gas flaring sites in Niger Delta

NGFCP boss made it clear that about US$ 3.5 billion worth of inward investments by third party investors is required to achieve the gas flare commercialization targets by 2020.

He added that “Although pipelines present the most viable option for transporting gas, scalable, containerized, skid mounted/barge type ‘plug & play’ technologies, virtual pipeline and compressed natural gas trucks would be preferred for quick wins; and despite a 70% decline in flaring over the past decade as a result of NNPC and their JV partners efforts. we still flared about 324 BCF of gas in Nigeria in 2017, exceeding the meagre ~800 MMSCFD utilized for power generation and ~450 MMSCFD utilized in domestic market

Additional details of the presentation also revealed that the NGFCP will deliver significant social and economic benefits to host communities in the Niger Delta, to investors and to the national economy. Business Hilights gathered that at the DGM in Houston, over 100 investors, project financiers and technology providers have now indicated interest to attend the “NGFCP Bidders Conference” as they are interested in financing and providing varying categories of technologies, the Bidders Conference is a window of opportunity.