Despite that the department of petroleum resources (DPR) has received bids from about 200 companies for the commercialisation of Nigeria’s 45 gas flaring points, the Nigeria gas flare commercialisation programme (NGFCP) is yet to take-off five years after it was launched.
The country is currently losing over $2.5 billion yearly because of severe gas flaring from 178 flare sites nationwide, a development expected to hit $9 trillion in the next 10 years, according to a report by Africa energy portal.
The NGFCP was launched in 2016 and is designed as the strategy to implement the policy objectives of the federal government for the elimination of gas flares with potential enormous multiplier and development outcomes for Nigeria.
The objective of NGFCP is to eliminate gas flaring through technically and commercially sustainable gas utilisation projects developed by competent third party investors who were invited to participate in a bid process.
As at February 2020, the DPR had announced that 200 companies were shortlisted out of 800 applications, to develop 45 gas flare sites across the country under NGFCP.
DPR chief executive officer, Mr. Sarki Auwalu, had said then that in selecting the 200 bidders, careful consideration was given to their capacity, quality of service, track record and ability to deliver on set targets.
But 15 months after their shortlisting, winners are yet to be announced and the project is yet to commence.
Auwalu, had said in June 2020, that the bidding round had been delayed due to travel restrictions aimed at stemming the spread of Coronavirus.
“What is holding (up) the programme is COVID-19. Because (the bidders) need access to the flare points…, they have to go and see (them) physically,” he’d said a year ago, adding “We had to officially extend the programme by six weeks.”
Yet, speaking a year later at the Nigerian International Petroleum Summit (NIPS) earlier this month, Auwalu still said: “We have received a bid from 200 companies. We evaluated these bids and we are yet to announce the winners.
“It is the first of its kind in the whole world because we are the first country that will take our flare gas points and turn it into commercial value.”
Nigeria continues to lose huge revenues to persistent gas flaring and ranks among the seventh gas flare countries in the world.
NOSDRA, a government-run satellite tracker, said that 1.8 billion standard cubic feet (scf) per day of gas was flared in the last nine years, one that should ordinarily attract about $3.6billion in penalty, little of which was paid.
The volume has generated 95.5 million tonnes of CO2 emissions. The flared gas is valued at $6.3 billion and it could generate 179.9 thousand GWh, data from NOSDRA showed.
In 2020 alone, natural gas valued at $1.24billion was burned by oil companies, one which could generate the annual electricity use of 804 million Nigerian citizens, according to the tracker.
Gas Flaring: Can Nigeria Actualise Its Stoppage By 2025?(Opens in a new browser tab)