Yemisi Izuora
The federal government is set to hold the country’s first bid round for natural gas in the first quarter next year.
The licensing round, which will be held after 11 years, is for auctioning of subsurface hydrocarbon property.
Currently, Nigeria has hundreds of natural gas flare sites which the federal government plans to monetise in hope to cut down on rate of gas flaring in the country.
Ministry of Petroleum Resources, in statement through Justice O. Derefaka, who is Programme Manager in the Nigerian Gas Flare Commercialisation Programme, NGFCP, said license winners “will take over the flare sites, monetise the molecules and boost the micro and macro economy in the process”.
According to the statement, “The auction presents a significant opportunity for domestic and international developers alike to participate in the largest market-driven flare gas monetization program undertaken on this scale globally”.
“Bidders will have flexibility of choosing which flare site(s) to bid for, determine the gas price, and their end-use market or gas product, as well as the technology to be deployed. Interested parties will need to demonstrate project development experience and proposed proven technology which we expect to be in commercial application.
“Additionally, parties will need to demonstrate technical and commercial capacity. Successful bidders will be granted title to the flare gas through a gas sales/supply agreement with the FGN (Federal government of Nigeria,” the statement read.
While the ministry said applicants do not have to be Nigerians, following a successful bid, each preferred bidder will be required to act through or establish a Nigerian corporate entity, which will enter into the necessary commercial agreements.
Applicants are expected from a variety of backgrounds, including communities, technology providers, project developers, resource and energy companies, industrial companies, infrastructure companies, and financial investors/lenders
The licensing round will be held before the 2019 general elections holding in February.