FG Targets $1bn Revenue from New Gas Flare Policy

OilA gas flare burns at the central processing plant for oil and gas in the Salym oilfields near Surgut, Russia. Photographer: Alexander Zemlianichenko Jr.
  • FG Targets $1bn Revenue from New Gas Flare Policy

The federal government has said its new gas flare out plan – the Nigeria Gas Flare Commercialisation Programme (NGFCP) – has the capacity to improve the country’s Gross Domestic Product (GDP) by $1 billion annually.

It also has the capacity to cut down greenhouse gas emission by 13 tons within the same period.

The government disclosed this in a statement released recently, by the Programme Manager of the NGFCP, Mr. Justice Derefaka.

The statement provided an update on the government’s implementation of the programme and explained that some target milestones had been achieved.

Amongst the milestones achieved, it noted were the submission of the evaluation report by the NGFCP Proposal Evaluation Committee (PEC) of the Statement of Qualification (SOQ) exercise in response to the Request for Qualification (RfQ) package of the NGFCP as well as submission of a report by the Independent Observers Group (IOG).

The statement added “The design of the NGFCP according to our development partners is an innovative, robust and scalable approach to gas flare reduction – a “game changer” (first of a kind) consistent with the climate change action plans anticipated in the Paris Climate Change Accords which could be replicable in many other gas flaring countries around the world with Nigeria setting the pace.

“Overall, the NGFCP has the potential of generating approximately US$3.5 billion of inward investment. The potential GDP impact is estimated at plus US$1 billion per annum.

“It could potentially unlock 2 – 3 LNG trains, or around 3000MW electricity generation as well as generate circa 600,000MT of LPG per year giving 6 million households access to clean energy through LPG.

“The programme could also bring inflow of new infrastructure players to enable gas uptake and usage in previously unreachable regions and business development from gas companies to unlock new domestic markets for gas,” it explained.

Going further, it stated that assuming project sizes in the range of $10 to 40 million were executed, the NGFCP has a potential of triggering around 70 to 90 projects.

“And over a 1.5 – 2-year period, the NGFCP could generate approximately 26,000 direct jobs (assuming an average direct labour force of 300 people per project) and approximately 300,000 direct and indirect jobs.

“Once operational, projects launched under the NCFCP would reduce Nigeria’s emissions by ~13 million tons of CO2 per year, consistent with the president’s commitments to the reduction of greenhouse gases under the Paris Climate Change Agreement, which could also be monetised under an emission credits/carbon sale programme at a value range of US$400 – 500 million. The NGFCP is clearly a high-impact programme,” the statement added.

About the Author

Samed Olukoya
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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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