On-the-four-ways-the-federal-governments-nigerian-gas-flare-commercialization-programme-ngfcp-will-enhance-nigerias-energy-security
September 7, 2020 | News
ON THE FOUR WAYS THE FEDERAL GOVERNMENT'S NIGERIAN GAS FLARE COMMERCIALIZATION PROGRAMME (NGFCP) WILL ENHANCE NIGERIA'S ENERGY SECURITY
President Muhammadu Buhari (Left) Dr. Emmanuel Ibe Kachikwu (Right)
Justice Derefaka, Program Manager Nigerian Gas Flare Commercialization Programme (NGFCP)
Folashade Omolara Yemi-Esan, Permanent Secretary, Ministry of Petroleum Resources, Nigeria
We are glad with the recent encouraging reports which indicate the Federal Government has again assured on its promise of harvesting flared Gas for the economic advantage of the country with its Nigerian Gas Flare Commercialization Programme (NGFCP). While expressing concerns that Gas flaring in Nigeria is a huge waste of precious resources. Justice Derefaka, the Programme Manager of the NGFCP, office of the Ministry of Petroleum Resources, also revealed that "Gas flaring is a tremendous waste which the Federal Government is not willing to tolerate, especially for a climate change perspective."
In his lead presentation at the recent 3rd Lawyers in Oil and gas Conference, titled: “The Impact of Government's Regulatory Policy and the Road to Sustainable Economic Growth the Lens of the NGFCP”, Justice Derefaka noted that "Nigeria's gas flare commercialization programme will contribute to energy security in Africa's largest economy by growing demand for gas-based solutions, creating enabling technology, grow midstream players and increasing environmental awareness”. The growing global demand for energy, fueled by rising population will make energy security a priority of many countries. Global population is expected to reach 10billion by 2050 with 67 percent living in cities. As fossil fuels decline, more gas investments would be required to complement renewables. An increase in energy demand which will be driven by economic growth, and as people seek to improve their quality of life, this will require a secure energy source. Even assuming significant future energy efficiency gains, global energy demand is expected to grow by 30% between 2015 and 2040 quoting lEA New Policies Scenario.
To prepare the country for this future, Derefaka said the gas flare commercialization programme had been developed to meet an anticipated gas demand projected to grow from industrial and domestic LPG demand. Gas will be heavily demanded by industries for plastics, fertilizer and power and demand for clean cooking will drive uptick in demand for LPG. Another result that the country could gain from the NGFCP is improved technology through introduction and refinement of new end-use technologies for example GTL and small-scale LNG. It will also reduce costs and eliminate barriers that fosters decline in the cost of CNG compressors. Derefaka also said the programme will encourage new midstream players in the Nigerian gas industry allowing inflow of new infrastructure players to enable gas uptake and usage in previously unreachable regions. This will drive business development from gas companies to unlock new domestic markets for gas leading to improved energy security for Nigeria.
Nigeria is a Signatory to Global Gas Flare Reduction Partnership (GGFRP) which works to increase use of natural gas associated with oil production. Nigeria is a part of the COP agreement, committed to emission reduction and cleaner energy. Derefaka stressed that these goals will be enhanced by the success of the NGFCP. Despite a 70% decline in flaring over the past decade, in 2015, around 1,000 MMSCFD of gas was flared in Nigeria, exceeding around 800 MMSCFD utilized for power generation and around 450 MMSCFD utilized in domestic industry. Nigeria has the world’s 7th biggest gas flare with about 172 flare sites. But the NGFCP seeks to abolish gas flaring by raising fines and providing an incentive for investors to use flared gas. Under the new regulations, the Federal Government has asserted its right to take gas free at the flare and will auction it off to third parties. According to Derefaka, the strength of the NGFCP is that it leverages institutional leadership and oversight to drive reform priorities and provide early warning to policy makers of regulatory issues that need to be fixed.
"Gas flaring accounts for two percent of all Green House Gases (GHG) emissions which are responsible for several ill-health and environmental challenges". Giving further insight into the analogy of the conference theme: 'Nigeria Oil and Gas Regulations - a reflection of the Economy' – the Programme Manager posited that, "In a World where we are under the surging pressure of climate change, we cannot get rid of a precious natural resources and waste it without recourse to turning it around for the growth of the economy." The Programme Manager argued further that contrary to failed speculations that flared Gas is an important part of the global energy transition, the closest ally to renewable.
The United Nations (UN), it would be noted has described “energy” as central to nearly every major challenge and opportunity the world faces today. Be it for jobs, security, climate change, food production or increasing incomes, access for energy is all essential. With concerns of lack of access to power by about 100 million Nigerians who are not connected to the national grid, Derefaka argued that time has come for Nigeria to commercialize gas flaring as a way of lifting many out of poverty and economic growth.
With reports that there are currently over 16,000 flare sites in 90 countries all over the world with over 150BCM gas flare annually and that a considerable number of these flare sites are in Nigeria. This is enough to produce 750 billion kWh power which is more than the entire power consumption on the African continent annually. We are however glad that the relevant authorities have taken a step further to state the Federal Government's position that companies flaring gas may not have their operating license renewed by 2020, since there are huge economic opportunities for energy conversion, as well as notable companies bidding for flared sites for commercial purposes.
The good thing about all of these objectives of the NGFCP initiative is the pace and political will being exhibited by the Federal Government to see that it becomes a reality in no distant future. According to Derefaka, “hopefully between now and the first week of June 2019, we would have qualified applicants that would move to the next stag... and those selected must have project experience, and technical knowhow that they would bring in to harness the flared gas in over 178 locations in the Niger Delta, which are in commercial applications. So, we are not just looking at companies that will come and take permits and do nothing. We want “serious-minded” businessmen. Which is why as part of our design, we have included “receivables”. So, you post a bond to demonstrate your seriousness, and of course you must have partnership with these technology providers because we are serious about what we are doing and because Government wants to address this gas flare issue once and for all. We have said it, and Mr. President has hinted it that gas flaring is no longer acceptable.
Without a doubt, it is evident that the NGFCP is a very worthy venture that should be encouraged by all stakeholders in and outside the industry, and there is need for relevant Federal Government authorities as well, to see that it becomes a reality. We also admonish that President Buhari, as the sitting President should be encouraged by all stakeholders to ensure that the Government's ongoing Gas Flare Commercialization programme, which will liberalize the development of the nation's gas sector and greatly improve the supply of power, actually becomes a “reality”. And like we have advised before now, the Federal Government should ensure that not even its agencies like the Department of Petroleum Resources (DPR) should stand as a bottleneck to the prompt realization of this objective as intended by the Federal Ministry of Petroleum Resources.
Zik Gbemre
We Mobilize Others to Fight for Individual Causes as if Those Were Our Causes
President Muhammadu Buhari (Left) Dr. Emmanuel Ibe Kachikwu (Right)
Justice Derefaka, Program Manager Nigerian Gas Flare Commercialization Programme (NGFCP)
Folashade Omolara Yemi-Esan, Permanent Secretary, Ministry of Petroleum Resources, Nigeria
We are glad with the recent encouraging reports which indicate the Federal Government has again assured on its promise of harvesting flared Gas for the economic advantage of the country with its Nigerian Gas Flare Commercialization Programme (NGFCP). While expressing concerns that Gas flaring in Nigeria is a huge waste of precious resources. Justice Derefaka, the Programme Manager of the NGFCP, office of the Ministry of Petroleum Resources, also revealed that "Gas flaring is a tremendous waste which the Federal Government is not willing to tolerate, especially for a climate change perspective."
In his lead presentation at the recent 3rd Lawyers in Oil and gas Conference, titled: “The Impact of Government's Regulatory Policy and the Road to Sustainable Economic Growth the Lens of the NGFCP”, Justice Derefaka noted that "Nigeria's gas flare commercialization programme will contribute to energy security in Africa's largest economy by growing demand for gas-based solutions, creating enabling technology, grow midstream players and increasing environmental awareness”. The growing global demand for energy, fueled by rising population will make energy security a priority of many countries. Global population is expected to reach 10billion by 2050 with 67 percent living in cities. As fossil fuels decline, more gas investments would be required to complement renewables. An increase in energy demand which will be driven by economic growth, and as people seek to improve their quality of life, this will require a secure energy source. Even assuming significant future energy efficiency gains, global energy demand is expected to grow by 30% between 2015 and 2040 quoting lEA New Policies Scenario.
To prepare the country for this future, Derefaka said the gas flare commercialization programme had been developed to meet an anticipated gas demand projected to grow from industrial and domestic LPG demand. Gas will be heavily demanded by industries for plastics, fertilizer and power and demand for clean cooking will drive uptick in demand for LPG. Another result that the country could gain from the NGFCP is improved technology through introduction and refinement of new end-use technologies for example GTL and small-scale LNG. It will also reduce costs and eliminate barriers that fosters decline in the cost of CNG compressors. Derefaka also said the programme will encourage new midstream players in the Nigerian gas industry allowing inflow of new infrastructure players to enable gas uptake and usage in previously unreachable regions. This will drive business development from gas companies to unlock new domestic markets for gas leading to improved energy security for Nigeria.
Nigeria is a Signatory to Global Gas Flare Reduction Partnership (GGFRP) which works to increase use of natural gas associated with oil production. Nigeria is a part of the COP agreement, committed to emission reduction and cleaner energy. Derefaka stressed that these goals will be enhanced by the success of the NGFCP. Despite a 70% decline in flaring over the past decade, in 2015, around 1,000 MMSCFD of gas was flared in Nigeria, exceeding around 800 MMSCFD utilized for power generation and around 450 MMSCFD utilized in domestic industry. Nigeria has the world’s 7th biggest gas flare with about 172 flare sites. But the NGFCP seeks to abolish gas flaring by raising fines and providing an incentive for investors to use flared gas. Under the new regulations, the Federal Government has asserted its right to take gas free at the flare and will auction it off to third parties. According to Derefaka, the strength of the NGFCP is that it leverages institutional leadership and oversight to drive reform priorities and provide early warning to policy makers of regulatory issues that need to be fixed.
"Gas flaring accounts for two percent of all Green House Gases (GHG) emissions which are responsible for several ill-health and environmental challenges". Giving further insight into the analogy of the conference theme: 'Nigeria Oil and Gas Regulations - a reflection of the Economy' – the Programme Manager posited that, "In a World where we are under the surging pressure of climate change, we cannot get rid of a precious natural resources and waste it without recourse to turning it around for the growth of the economy." The Programme Manager argued further that contrary to failed speculations that flared Gas is an important part of the global energy transition, the closest ally to renewable.
The United Nations (UN), it would be noted has described “energy” as central to nearly every major challenge and opportunity the world faces today. Be it for jobs, security, climate change, food production or increasing incomes, access for energy is all essential. With concerns of lack of access to power by about 100 million Nigerians who are not connected to the national grid, Derefaka argued that time has come for Nigeria to commercialize gas flaring as a way of lifting many out of poverty and economic growth.
With reports that there are currently over 16,000 flare sites in 90 countries all over the world with over 150BCM gas flare annually and that a considerable number of these flare sites are in Nigeria. This is enough to produce 750 billion kWh power which is more than the entire power consumption on the African continent annually. We are however glad that the relevant authorities have taken a step further to state the Federal Government's position that companies flaring gas may not have their operating license renewed by 2020, since there are huge economic opportunities for energy conversion, as well as notable companies bidding for flared sites for commercial purposes.
The good thing about all of these objectives of the NGFCP initiative is the pace and political will being exhibited by the Federal Government to see that it becomes a reality in no distant future. According to Derefaka, “hopefully between now and the first week of June 2019, we would have qualified applicants that would move to the next stag... and those selected must have project experience, and technical knowhow that they would bring in to harness the flared gas in over 178 locations in the Niger Delta, which are in commercial applications. So, we are not just looking at companies that will come and take permits and do nothing. We want “serious-minded” businessmen. Which is why as part of our design, we have included “receivables”. So, you post a bond to demonstrate your seriousness, and of course you must have partnership with these technology providers because we are serious about what we are doing and because Government wants to address this gas flare issue once and for all. We have said it, and Mr. President has hinted it that gas flaring is no longer acceptable.
Without a doubt, it is evident that the NGFCP is a very worthy venture that should be encouraged by all stakeholders in and outside the industry, and there is need for relevant Federal Government authorities as well, to see that it becomes a reality. We also admonish that President Buhari, as the sitting President should be encouraged by all stakeholders to ensure that the Government's ongoing Gas Flare Commercialization programme, which will liberalize the development of the nation's gas sector and greatly improve the supply of power, actually becomes a “reality”. And like we have advised before now, the Federal Government should ensure that not even its agencies like the Department of Petroleum Resources (DPR) should stand as a bottleneck to the prompt realization of this objective as intended by the Federal Ministry of Petroleum Resources.
Zik Gbemre
We Mobilize Others to Fight for Individual Causes as if Those Were Our Causes