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NUPRC shortlists 139 firms for commercialised gas flare programme

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has shortlisted 139 firms that applied for Nigerian Gas Flare Commercialisation Programme (NGFCP).

About 300 companies applied to the gas buying and trading scheme to end gas flaring from 48 oil production sites in the country.

The Chief Executive Officer (CEO) of NUPRC, Gbenga Komolafe said this at the NGFCP bidders’ conference and investors’ forum, on Thursday in Abuja.

He said the forum was being organised to intimate qualified applicants, partners, sponsors and technology providers on the structure of the “Request for Proposal (RFP).”

Komolafe said it was also an opportunity to provide further guidance on upcoming programme of activities while listening and collating feedback from all participants towards optimising the RFP phase.

He said that the programme received about 300 applications during the Statement of Qualification (SOQ) phase of this bid process before the emergence of the 139 successful applicants in line with the RFQ published criteria.

“Therefore, for all qualified applicants, your success on the SOQ stage is no mean feat, however, that was only a start of the journey as the real deal is in making a robust and competitive proposal.

“This proposal must be with demonstrable evidence for capacity to deliver on the flare monetisation projects, in line with the terms of the RFP would be your desired destination.

“Apart from forestalling the deleterious impacts of gas flaring on the environment, the programme also ends the wanton wastage of our premium economic resource.

“In today’s carbon constrained world, where fossil fuel is becoming less popular, in view of issues of climate change, natural gas has assumed a stature of significant importance as the bridging fuel for many oil and gas producing nations.

“For us here in Nigeria, gas has been adopted as our transition fuel to drive the industrialisation of the Nation’s economy in line with the expectations of the Decade of Gas initiatives launched by the Government,” Komolafe said.

The NUPRC boss further said that the NGFCP scheme also targeted at creating investment and employment opportunities as well as encouraging increased capital inflow to the Nigerian Oil and Gas sector.

He noted that the value derivable was multifaceted as it aligned with the focus areas of the country’s sustainable development goals.

“The NGFCP 2022 is first among series of competitive auctions whereby Flare Gas that would otherwise have been directed to flare will be put on sale by the Commission to interested entities as prospective title holders of the flare gas.

“In this programme, prospective bidders are expected to submit bid proposals in line with the requirements and terms of the RFP, covering such areas as technical, commercial, financial, and other relevant information regarding the project that the qualified applicant intends to develop.

“Such projects may include a plan to use the gas as fuel or feedstock or both for products to be disposed of in either the domestic or international markets.

“All Proposals from bidders will be judged strictly on their merits according to the criteria published in RFP document which has since been uploaded on the NGFCP portal,” he said.

He said that applicants for the second phase of the programme would have access to the data room for data prying and leasing, including suite of commercial agreements, for the 48 gas flare sites on offer in the NGFCP 2022.

According to Komolafe, the precise flare sites, volumes and compositions of gas offer would be accessed in the data room available to the applicants via the NGFCP 2022 portal upon payment of relevant fees as prescribed in the RFP.

“The Data room sessions will be held virtually to provide flexibility and comfort to all participants.”

He assured that the commission would ensure an open, transparent, competitive, and non-discriminatory bidding process in line with the provisions of Section 74 of Petroleum Industry Act.

Also speaking, the Manager, Legal Unit of NUPRC, Austin Okwah said the bidding companies were expected to submit their proposals online and physical and must contain details of their mandatory consortium information.

Okwah said the proposals must also contain bid bonds issued by reputable banks or insurance companies.

He listed three agreements that underpinned the programme to include Milestone Agreement which defined programme conceptualisation (agreement between the commission and flare gas buyer).

Others are Gas Sales Agreement which had quantity limitation and guarantee as well as Connection Agreement which required taking the gas from the flare harder to the project site and operation procedures.

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Energy

Marketers advocate ethanol as alternative fuel, plan $7bn yearly savings

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The Major Energies Marketers Association of Nigeria has stated that ethanol could be adopted as a biofuel to help Nigeria in reducing energy poverty and emissions.

According to MEMAN during a recent quarterly press webinar and engagement, about $7.4 billion could be saved annually by taking advantage of Nigeria’s ethanol resources as a biofuel to support petrol.

Ethanol is a biofuel that is commonly used as a substitute or additive to petrol in vehicles. It is typically produced through the fermentation of plant materials like cassava, corn, sugarcane, and others.

MEMAN noted that ethanol blended into biofuel as a transformative energy source has the potential to change Nigeria’s energy landscape and pave the way for a sustainable economy.

Experts, who spoke at the webinar, revealed that Nigeria had what it takes to exploit its ethanol to biofuel potential.

Presenting a paper titled ‘Ethanol as a Biofuel,’ a Senior Consultant with Africa Practice, Agwu Ojowu, pointed out that developing the ethanol industry could save the nation about $7.4bn ba year.

“Nigeria’s cassava production, standing at 63 million metric tonnes annually, represents 26 per cent of the global total. However, with 40 percent of this yield lost each year, there is a significant economic loss estimated at $7.4bn. Developing the ethanol industry could mitigate these losses, enhance economic stability, and capitalise on the depreciating currency to reduce costs,” Ojowu stated.

He emphasised that ethanol’s higher octane rating improves fuel quality and helps meet environmental standards by reducing sulphur content and greenhouse gas emissions.

Those attributes, he said, make ethanol a cost-effective and environmentally friendly alternative to petrol, aligning with Nigeria’s climate commitments.

Going down memory lane, Ojowu recalled that Nigeria’s foray into ethanol began with the 2007 biofuels policy, which mandated a 10 percent ethanol blend in fuel.

“Despite initial challenges, including the suspension of the policy in 2008, because of blending inconsistencies, the potential of ethanol remains significant. Ethanol’s cost-effectiveness compared to petrol has historically led to economic arbitrage, suggesting that a well-regulated biofuel market could be economically advantageous,” he said.

Ojowu added that ethanol presents numerous benefits, including economic, environmental, and agricultural advantages, without necessitating vehicle modifications.

The Executive Secretary of MEMAN, Clement Isong, also emphasised the role of renewable energy in addressing Nigeria’s energy poverty.

He highlighted the importance of diverse energy sources, including biofuels, solar, hydroelectricity, and wind energy, to create a balanced and sustainable energy mix.

“MEMAN is committed to engaging with industry stakeholders to advocate for energy solutions that meet Nigeria’s needs,” Isong said.

He expressed optimism about the future of renewable energy in Nigeria and the continued efforts to enhance press engagement and industry collaboration.

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Abuja DisCo adds 45 new feeders to Band A

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The Abuja Electricity Distribution Company, (AEDC) has disclosed it has added 45 new feeders to the Band A category of customers who would enjoy a minimum of 20 hours of electricity as stipulated by the Nigerian Electricity Regulatory Commission (NERC).

The new feeders are majorly in the Asokoro, Wuye, Garki, Suleja, Apo and other areas of the capital city. This was disclosed by the Disco on their official X (formerly Twitter) page where it described the feeder location and specific areas served by the feeder.

Other areas where feeders were upgraded to band A include; Suleja, Garki Area II, Wuse, Anyigba, Mpape, Jabi, Gwagwalada, Gwarimpa etc.

The DisCo noted that the upgrade to band A for the affected feeder location is effective from June 1, 2024.  Similar upgrades across other DisCos

In April, the Nigerian Electricity Regulatory Commission (NERC) announced a more than 200 percent increase in electricity tariffs for Band A customers.

This move is part of efforts to eliminate electricity subsidies and implement a cost-reflective tariff system in the power sector.

Abuja Disco’s addition of new feeders to Band A is in line with similar actions by other distribution companies like Eko and Ikeja DisCos following the tariff hike.

Band A customers are on specific feeders that receive a minimum of 20 hours of electricity daily. According to NERC, these customers account for approximately 17 percent of all electricity users in the country.

The decision to raise electricity tariffs for Band A customers has sparked public outrage, particularly among trade and labour unions nationwide.

Organised labour members have protested the increase, while the Manufacturers Association of Nigeria (MAN) has advised its members not to pay the new tariff, claiming they were not consulted.

MAN has instructed its members to continue paying the old rate of N66/kWh. The various electricity distribution companies have vowed to disconnect customers who fail to pay the new tariff under their band.

The group has also filed a petition with NERC regarding the tariff hike, which is currently awaiting resolution.

Furthermore, the Organised Private Sector (OPS) comprising all chambers of commerce and trade associations across the country had warned that the new tariff could lead to the shutdown of 65 percent of businesses across the country.  The group stated that the over 200 percent hike in electricity tariff to N220/KWh then made Nigeria’s power cost the highest in the world. It warned that the hike could exacerbate the economic situation in the country and push more people into unemployment and poverty.

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Energy

Settlement agreement: NNPC asks court to discontinue lawsuit against Mobil subsidiaries

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The Nigerian National Petroleum Company Limited (NNPC) has filed a motion to discontinue its lawsuit against Mobil Nigeria subsidiaries and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in the High Court of the Federal Capital Territory, Abuja.

The motion is aimed at finalizing a settlement agreement for the divestment of Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited for $1.28 billion.

NNPC’s legal counsel, Afe Babalola & Co., presented the motion, requesting the court’s permission to withdraw the suit and strike it off the court’s cause list.

The motion cites legal precedents, including the Supreme Court decision in Adama v. Maigari (2019), which supports the relisting of a discontinued suit if the out-of-court settlement fails.

The lawsuit, originally filed by NNPC on July 5, 2022, was referred to arbitration on August 3, 2022.

Recent negotiations have led to an out-of-court settlement decision, with the Settlement Agreement requiring NNPC to withdraw the lawsuit.

The court is currently considering the motion, which, if granted, would pave the way for the parties to complete the settlement and divestment transaction.

No further details have been released, but sources indicate that the settlement agreement includes clauses designed to align the interests of all parties and finalize the transaction.

The development is seen as a significant step towards resolving the longstanding dispute between NNPC, the Mobil subsidiaries, and NUPRC.

Approval of the motion would allow the parties to focus on finalizing the settlement and completing the divestment transaction.

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