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Nigeria Requires $3.5bn Investment to End Gas Flaring By 2020

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Gas Exports Drop as Shell Declares Force Majeure
  • Nigeria Requires $3.5bn Investment to End Gas Flaring By 2020

Nigeria would need at least $3.5 billion investments to activate the new market-based initiative it had set up to end the practice of gas flaring at oil fields in the Niger Delta by 2020, the Programme Manager of the Nigerian Gas Flare Commercialisation Programme (NGFCP), Mr. Justice Derefaka, has disclosed.

Speaking at the 36th edition of the annual conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) held in Lagos recently, Derefaka, explained that the $3.5 billion to be sought by Nigeria would be brought in by investors willing to participate in the NGFCP, which according to him, has immense benefits.

Derefaka, stated the $3.5 billion investment would give annual returns of $1 billion.

“The NGFCP economic analysis also shows that with the US3.5 billion inward investments pumped in to implement the NGFCP, huge social and economic benefits would accrue to host communities in the Niger Delta, investors and the national economy as a whole.

“Benefits would include curbing pollution, climate change, global warming impacts in local communities and providing households with clean energy, particularly in unlocking LPG (cooking gas i.e. produce 600,000 MT of LPG per year),” said Derefaka.

He further explained: “In summary, this paper pinpoints the programme could trigger up to 85 projects and generate approximately 300,000 direct and indirect jobs in total.
“The potential annual revenue generation, GDP impact to the federation account is estimated at U$1 billion per annum.”

According to him, the flared gas to be monetised in the NGFCP would be harnessed from top 50 flaring points across the Niger Delta, thus reducing the volume of flared gas by 80 per cent.

He also explained that the NGFCP would reduce Nigeria’s carbon emissions by approximately 13 million tons per year, which could also be monetised under an emission credits or carbon sale programme.

Additionally, Derefaka stated that the international development partners to the NGFCP have scrutinised the initiative and subsequently proclaimed its design as detailed.
This, according to him, was an affirmation that it is an innovative, robust and scalable approach to gas flare reduction which could be replicated in many other gas flaring countries around the World.

“Overall, the NGFCP has been designed as the contribution of the petroleum sector to Nigeria’s Intended Nationally Determined Contributions (INDC) under the Paris Agreement and it is the first market driven program undertaken on this scale globally, making it a high-impact program,” he added.

Speaking on the transactional and commercial contractual structures of the NGFCP, Derefaka, stated that there would be a Milestone Development Agreement (MDA) between Flare Gas Buyer (FGB) and the federal government with the FGB undertaking to implement its project according to a set of milestones.

This, he added would also include Gas Supply Agreement (GSA) between the FGB and government which confers the government’s title of flare gas to FGBs, containing the quantities of gas contracted for, the price and the ‘take or pay terms.’

Derefaka, stated that there would also be the Connection Agreement (ConnAg) between FGBs and gas producers containing the flare gas delivery terms and conditions, rules for the physical connection of facilities, and nomination procedures; Deliver or Pay Agreement (DoPA) which is an undertaking of producers with respect to guaranteed flare gas; and Permit to Access Flare Gas (PAFG) which is a permit granted to FGB upon becoming a permit holder.

“On completion of all commercial and contractual agreement, the flare gas buyer becomes a permit holder. The FGB will pay an award fee for grant of permit to access flare gas.
“And, simultaneously with the execution of the final commercial agreements, Flare Gas Buyer will be awarded a Permit to Access Flare Gas (PAFG). This is a permit prescribed under the regulations, and is granted by DPR on behalf of FGN.

“It permits permit holder to access the flare sites for the purpose of constructing the flare gas connection assets to the producer’s facilities at all flare sites specified in the permit.

“It permits permit holder to take flare gas in the amounts contracted for under the GSA. It permits other access to those flare sites for operational reasons during the currency of the GSA. Permit holder must install metering, maintain logs and submit reports on gas utilisation, flaring and venting,” he added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Business

Businesses Groan as Price of Diesel Rises to N250 Per Litre

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Petrol Importation

Businesses Groan as Price of Diesel Rises to N250 Per Litre

Businesses have started feeling the negative impact of the rising price of Automotive Gas Oil, known as diesel.

A single litre now goes for N250 in some parts of Lagos, with businesses taking a beating on the back of rising energy costs.

Our correspondent observed that some filling stations in Lagos had increased the price of the product to N250 per litre, while many others sold it at between N220-N245.

Northwest Petroleum along the Oshodi-Apapa road increased the pump price of diesel to N250 per litre; AP (Ardova Plc), along Airport road, Ikeja, N248; and Oando, along Acme Road, N240.

The National Bureau of Statistics, in its AGO price report on Tuesday, said the average price paid by consumers for diesel increased by 0.22 per cent to N224.86 per litre in January 2021 from to N224.37 in December 2020.

It said states with the highest average price of diesel were Adamawa (N268.33), Zamfara (N262.78) and Kebbi (N257.50).

“States with the lowest average price of diesel were Osun (N194.60), Anambra (N195.83) and Enugu (N198.24),” the NBS added.

Crude oil price accounts for a large chunk of the final cost of petroleum products, and the deregulation of the downstream oil sector by the Federal Government means that the pump prices of the products will reflect changes in the international oil market.

The international oil benchmark, Brent crude, has risen by more than 25 per cent this year from the $51.22 per barrel at which it closed last year. It rose to $65.25 per barrel as of 6:30pm Nigerian time on Tuesday.

Diesel is mostly used by businesses to power their generators amid a lack of reliable power supply from the national grid.

The President, Association of Small Business Owners of Nigeria, Mr Femi Egbesola, lamented that the recent increase in the price of diesel was taking a heavy toll on businesses, especially Small and Medium Enterprises.

“The cost of diesel and raw material is giving us a nightmare. The price of diesel has been skyrocketing in a way that creates fear in particularly manufacturers,” he told our correspondent on Tuesday.

According to him, it is difficult for businesses to factor all the increase in diesel price in their final product prices.

Egbesola said, “That is why a lot of companies are downsizing and are making sure that they only produce products that they are so sure will sell in the market.

“Many companies have reduced their product lines significantly just to be able to cope. And that is not good for us because by the time this goes on, unemployment will increase. I believe government should be able to do something about this.”

He said although the downstream petroleum sector had been deregulated, there should be checks and balances.

Egbesola said many small businesses’ savings had been eroded already because ‘we keep spending our savings to make sure we don’t close shop’.

He said, “If things continue this way, there is no way we are not going to close shop. We are still struggling with the recent increase in electricity tariff.

“Many small businesses still depend so much on diesel generators because there is no alternative power supply. It is only the big players that have the facilities to use gas. And we cannot use solar installation because it is very expensive.”

Nigeria, Africa’s largest oil producer, relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years.

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Appointments

United Capital Appoints Latunji Head, Marketing/Corporate Communications

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United-capital

United Capital Appoints Latunji Head, Marketing/Corporate Communications

United Capital Plc has been appointed, Tolu Latunji as its Head, Marketing & Corporate Communications.

In the new role, he is expected to drive a strategic communications, marketing and brand management programme for the investment banking group.

Latunji is a communication and marketing expert with 12 years’ experience in products development, marketing, brand & franchise building, effective management and communication of strategic objectives whilst ensuring adequate visibility for both organisation and product/service offerings through product, content and brand initiatives.

“With a 360 degree knowledge of communications and marketing, which includes but not limited to – brand management and initiatives, corporate affairs, internal and external affairs, product and brand marketing, event management and experiential marketing, cluster/segment marketing, Tolu has served at various capacities on government constituted sub-committees on financial inclusion,” a statement explained.

Prior to joining United Capital Plc, he was the Managing Partner of Ten & Square Media Co., a bespoke creative ideation and brand/crisis management firm, based in Lagos, Dakar and London.

Latunji was recently the Strategic Communications lead at FMDQ Securities Exchange, Nigeria’s first integrated financial market infrastructure (FMI), where he had the responsibility of effectively positioning the group, together with its subsidiaries, as the most sophisticated and technologically driven securities exchange in Africa.

Prior to that, he worked in Guaranty Trust Bank for nine years with roles in brand management & monitoring, events and experiential marketing, products and content marketing and user experience.

He led the marketing team to the successful development and launch of various retail, SME and corporate products. He was also instrumental in curating and developing the bank’s social footprints. Outside the corporate environment, Tolu engages in various humanitarian activities with food banks and empowerment programmes. He holds a B.Sc. Economics from University of Lagos.

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Business

Firm to Train 100 Nigerians in Solar Installation

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300MW Solar energy

Firm to Train 100 Nigerians in Solar Installation

A learning institute, GreCo Academy is seeking to train 100 Nigerians on solar installation in Nigeria.

The trainees are expected to undergo a 90- day intensive vocational training after which successful candidates will be rewarded with a three-month paid internship with a renowned Renewable Energy Company in Nigeria, according to a statement by the firm.

The training will consist of 80 days virtual engagement and 10 days physical engagement.

This initiative, according to the firm is aimed at giving the trained candidates hands-on practical experience in their journey to becoming professional solar installers in the country.

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