Nigeria's 1st Bid Round for Flare Reductions Soon
Nigeria's president Muhammadu Buhari has approved new regulations that aim to spur commercial development of gas currently flared, it emerged this week.
He is believed to have approved The Flare Gas Prevention of Waste and Pollution Regulations 2018 last month, following their parliamentary approval in April 2017.
The new regulations will now be implemented under the country's existing National Gas Flare Commercialisation Programme (NGFCP) which was launched in 2016 and lists four ways that the government hopes will achieve zero gas flaring by 2020: fixing the market/licensing process, improving access to financial incentives, improving monitoring and enforcement, and engaging with partners. Full details are now due for release next month.
Nigeria loses some $1bn of revenues because of gas flaring, as it does not have the capacity to capture and commercialise such gas. NGFCP programme manager Justice Derefaka in April 2018 said that 0.7bn ft3/d was being flared at 178 flare sites in the country, while about $3.5bn worth of inward investments were required to accomplish the country's flare gas commercialisation targets by 2020.
After flaring for several years, flaring in Nigeria increased year on year by 0.3bn m³ to 7.6bn m³ in 2017, according to data published last month by the World Bank.
The NGFCP was established by the federal government to achieve a flare-out by 2020, through commercialising flared gas in the country. Although the programme had previously been questioned by experts on how effective it will be in the actual achievement of a flare out by the specified time, the president's approval of the regulation shows progress of some sorts.
Centurion Law Group CEO NJ Ayuk has written in the past how the NGFCP has failed to make any impact to date in reducing flaring.
However, interviewed by NGW Magazine on July 25, the World Bank's Global Gas Flaring Reduction programme manager Bjorn Hamso said his team was "very excited about the plans of the government in this area; we are working with them" acknowledging the recently-passed flaring regulations that were due for presidential approval.
And in an interview this week with Nigeria's ThisDay newspaper, Derefaka, the ministry of petroleum official handling their implementation, said that the new rules will kickstart the programme's execution: "We are pleased to inform that President Buhari has approved the regulatory instrument that will underpin the implementation of the NGFCP. We have completed the design of the key programme's transactional and commercial framework and documentation. We expect to announce the first bid round for flare gas to the public within 3Q 2018." That should mean the bid process is released by next month.