FG shortlists 42 companies for commercialization program: Gas flaring

The Nigerian Gas Flare Commercialization Programme will begin in 2022, the Federal Government stated on Wednesday, and 42 companies have received letters of award.

The Nigerian Upstream Petroleum Regulatory Commission made this announcement in a statement that was released in Abuja.

“The NUPRC hereby announces the outcome of the bidding exercise and issuance of letters of award to 42 companies/entities deemed successful in the fiercely contested bid for 49 flare sites put forward during the 2022 Nigerian Gas Flare Commercialization Programme auction process,” the statement said in part.

“For the creation of 40 independent single-flare sites, 38 of the companies/entities have received awards; for the development of nine cluster sites, four have received awards.

For the associated flare locations, “Reserve bidders’ status has also been granted to some organizations in the event the preferred bidders fail to meet the criteria and conditions required in the RFP (Request for Proposal).”

Award letters, according to the NUPRC, have already been sent to the relevant successful entities via the proper channels.

In order to comply with the Petroleum Industry Act’s requirements and to take into account the current operational and economic conditions in Nigeria, the NUPRC reorganized the gas flare commercialization project and re-launched it in the third quarter of 2022.

According to the commission, multiple interactions with pertinent parties were responsible for the NGFCP bid process’ notable success.

Among the players, according to the report, are domestic investors, foreign development organizations, oil and gas producers, technological companies, and financial institutions.

According to the upstream oil industry regulator, “The commission’s engagements were to energize and maintain interest in the program, attract investments, and drive participation by local and foreign organizations.”

It stated that 300 businesses/entities expressed interest in submitting a Statement of Qualification as new participants or revalidating their pre-qualification status as current participants in response to the Request for Qualification published in the fourth quarter of last year.

Following the review of SOQs, 139 applicants in total were chosen as qualified applicants and given that status. In order to allow competent candidates to put together their respective bids for any of the 49 flare sites on offer, the commission subsequently issued the Request for Proposal in the first quarter of 2023.

“88 entities, comprising individual enterprises and consortiums replied to the RFP and submitted a total of 137 proposals,” according to the NUPRC. “Each proposal contained technical, commercial, and financial paperwork for one or more of the 49 flare locations for either standalone or cluster development.”

The proposal evaluations were properly completed by the commission, and clearance was obtained to name 38 firms and entities as the successful bidders for 40 sites for freestanding, single-flare site developments and four companies and entities for nine sites to be developed as clusters.

In the event that the preferred bidders are unable to comply with the RFP’s terms and conditions, other companies were also granted reserve bidder status for the appropriate flare sites.

According to the statement, “at this point, the preferred bidders would separately proceed to negotiate the series of commercial agreements with pertinent parties and effect payment of the specified award fees to enable the awarding of permit to access flare gas by the commission.”

The upstream regulator announced that KPMG, a global network of professional firms, had been given the go-ahead to collaborate with the commission in carrying out the award in order to ensure the commercialization of gas flare-outs was carried out successfully.

The commission thanked the winning bidders and encouraged them to continue with the program’s final stages in order to get permits and carry out viable projects that would use flare gas to generate value.