New Guidelines Set Governing Framework for Flare Gas and Associated Gas Utilization Projects in Nigeria

Recently, the Department of Petroleum Resources (DPR) issued a guidelines in furtherance of the objectives of the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018.

The guidelines essentially provide an operational framework for the implementation of the Flare Gas Regulations, which were earlier issued to ultimately promote the monetization of gas from flares while curbing harmful environmental impact arising from such gas flaring and venting.

The new guidelines, which also derive legal and regulatory backing from some primary legislation and policy documents in the industry besides the Flare Gas Regulations, are separately titled:

  • Guidelines for Grant of Permit to Access Flare Gas
  • Guidelines for Flare Gas Measurement, Data Management, and Reporting Obligations
  • Guidelines for Flare Payments
  • Guidelines for Producer's Associated Gas Utilization Project

On a preliminary note, the guidelines, to a large extent, expand on relevant provisions in existing legislations and regulations such as the Associated Gas Reinjection Act, Petroleum Act, Petroleum Refining Regulations, and the recently issued Flare Gas Regulations. Indeed, the DPR, pursuant to its powers under the Flare Gas Regulations, has now, by these guidelines, specified the fees for data prying, data leasing and award of permit to access flare gas. Thus, it could be surmized that some significant addition has been introduced by the guidelines to existing regulatory framework covering flare gas

The recently issued guidelines have now collectively and more clearly set out the framework for the commercialization of flare gas in Nigeria. Additionally, these guidelines reflect the commitment of the federal government of Nigeria to reduce the environmental and social impact of gas flaring, as well as develop the gas market in Nigeria by facilitating access to new economic opportunities that may be derived from gas flare capture.

Indeed, the guidelines, if well applied, will enhance the attainment of the objectives set under the Nigerian Gas Flare Commercialization Programme and the subsequent National Gas Policy approved by the Federal Executive Council in 2016 and 2017, respectively. To this end, the new guidelines are expected to drive in the short, medium, and long terms

  • Clarification of the rules guiding investment in the gas sector
  • Provision of an enabling environment for increased private sector participation in the gas sector
  • Utilization of natural gas to reduce greenhouse gas emissions in line with the country's obligations as a party to the Paris Agreement on Climate Change

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