The policy position of the Federal Government of Nigeria (FGN) is that gas flaring is unacceptable and the FGN has initiated a number of actions to reaffirm its commitment to ending the practice of gas flaring in our oil fields. Specifically, the FGN has ratified the Paris Climate Change Agreement, and is a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030 whilst committing to a national flare-out target by year 2020.
Furthermore, in recognition that flared gas could be harnessed to stimulate economic growth, drive investments and provide jobs in oil producing communities and indeed for Nigerians through the utilization of widely available innovative technologies, the Federal Executive Council (Nigeria’s cabinet) has approved the Nigerian Gas Flare Commercialisation Programme (“NGFCP”). This programme was launched by the Minister of State for Petroleum Resources (“Minister”) on December 13, 2016.
The NGFCP is designed as the strategy to implement the policy objectives of the FGN for the elimination of gas flares with potentially enormous multiplier and development outcomes for Nigeria. The objective of the NGFCP is to eliminate gas flaring through technically and commercially sustainable gas utilization projects developed by competent third party investors who will be invited to participate in a competitive and transparent bid process. The commercialisation approach has been considered from legal, technical, economic, commercial and developmental standpoints. 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.
The NGFCP will offer flare gas for sale by the Federal Government of Nigeria through a transparent and competitive bidding process. A structure has been devised to provide project bankability for the Flare Gas Buyers, which is essential to the success of the Programme.
The Bid Process
The NGFCP is a market-driven mechanism and follows a transparent and competitive procurement process designed to attract competent third party investors from across the world. Flare gas is available at a price the successful investors have bid, for use as fuel and/or feedstock in proven gas utilization technologies. The bidding process will be carried out using a two-stage procurement process.
The First Stage of the bidding process is a Request for Qualification (RFQ). The RFQ package will be available to parties that have registered with the NGFCP through the Programme Portal: www.ngfcp.gov.ng
Qualified Applicants will then be invited to proceed to the Second Stage (i.e. issuance of the Request for Proposal – RFP) of the bidding process where they will be requested to submit a detailed proposal which must be in conformity with the Request for Proposal (RFP) package requirements.
Registered parties are eligible to download the RFQ package from the NGFCP Portal.
Registered parties may then submit a Statement of Qualification (SOQ) in line with the RFQ package requirements, and a signed Confidentiality Agreement, and make payment of the SOQ Submission Fee, to qualify as Applicants.
The RFQ will be available to all parties that have registered for the NGFCP at any time up to the SOQ submission deadline.
SOQs submitted by the due date will be evaluated against established criteria and Applicants will be advised if they have or have not been awarded Qualified Applicant status.
A list of those who have been awarded Qualified Applicant status will be published on the NGFCP Portal, and these parties will be invited to proceed to the second stage (RFP) of the bidding process.
Qualified Applicants will be able to access the RFP package from the NGFCP Portal and also, in exchange for paying a Data Prying Fee and/or Data Leasing Fee, may access/download data from the NGFCP Portal on the flare sites in the NGFCP. Data Leasing is subject to Qualified Applicants signing a Confidentiality Agreement supported with a Power of Attorney.
Qualified Applicants submit a detailed proposal, which must be in conformity with the RFP package requirements, and include provision of the required Bid Bond. Upon meeting these criteria, the Qualified Applicants attain “Bidder” status.
The bids presented by Bidders will be evaluated by a Proposals Evaluation Committee (“PEC”) appointed by the Minister of Petroleum Resources and based on pre-established criteria as detailed in the RFP package.
Following evaluation, the Federal Government of Nigeria will select Preferred Bidders and, once a Milestone Bond has been received and necessary Commercial Agreements have been executed, Preferred Bidders can develop their Project through financial close and construction to operation.
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Harnessing Nigeria's Flare Gas For Sustainable Value & Wealth Creation.
NGFCP