GasFlareStudyNG

completed

The market assessment will provide a knowledge base on the feasibility and attractiveness of gas-to-market projects, including the transformation of flare gas to end-products and the handover of end-products to potential off-takers. The market study will include a catalogue of main challenges to the feasibility of these projects and identify measures to address the challenges. The goal is not to carry out a detailed analysis of each flare site but to identify priority commercialization pathways and possible measures to reduce barriers. The scope of the study would include the following: (i) Current and future demand for, and prices of, end-products (electricity, methanol, fertilizers, other petrochemicals) or fuels that could be substituted (diesel, fuel oil, gasoline); (ii) Suitability in the Nigerian context of different proven technologies in commercial application that can convert flare gas into end products; (iii) Costs and other considerations at different stages along the supply chain, such as economies of scale, willingness and ability of potential consumers to pay, distance to and availability of large infrastructure, and risks that will reduce the commercial viability of projects; (iv) Net-back calculations based on end-product prices and costs incurred along the supply chain estimated in (iii) up to the custody transfer point; and (v) Market sounding with a range of stakeholders to obtain, amongst others, the following information: a) general perception among industry players regarding the NGFCP; b) general feedback from the finance community regarding appetite to fund NGFCP projects and identify/quantify the main gaps that need to be mitigated; and c) input from original equipment manufacturers. The study will prioritize projects based on the findings and calculate the financial rate of return and the maximum price of gas that can be offered, together with sensitivity analysis changing key assumptions (capital and operating expenditures, prices of gas or end-products being sold, the Nigerian/dollar exchange rate, and prices of competing goods and services where applicable). As part of the market assessment, the consultant will undertake a consultation process with key stakeholders in the market first to collect data and information that will feed into their analysis. A validation workshop will be organized by the consultant to share the preliminary findings with the various stakeholders and to gather feedback on the key findings. The consultant will use the feedback to revise and finalize the report.