Nigeria: Federal Govt, IOCs Adopt New Strategies to End Gas Flaring

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Nigeria has vast gas resources and the development of this commodity has been one of the major policy thrusts of successive administrations.

Similarly, oil and gas companies operating in Nigeria have been partnering the government, particularly through the Nigerian National Petroleum Corporation, to develop the country’s gas resources.

According to the Department of Petroleum Resources, Nigeria has the largest gas reserves in Africa and is ranked 9th globally.

Current estimates from the DPR put Nigeria’s proven gas reserves at about 200 trillion standard cubic feet and 600Tcf unproven.

Among the quantum of gas produced, utilised in Nigeria and exported by NNPC and IOCs, some percentage is flared.

Although gas flaring in Nigeria has been reducing over the years, operators in the sector said the pollution caused by flared gas to the environment was still devastating, especially in the Niger Delta.

This, they said, had made it vital for the country to put an end to gas flaring, a development that had made operators devise new measures to address the challenge.

Data obtained from the NNPC in Abuja showed that in terms of gas production and utilisation, Nigeria averages about 8.4 billion standard cubic feet per day.

Out of this amount, only 18 per cent of the production is consumed in the domestic market, which is mainly for power, industries and West Africa Gas Project.

Our correspondent gathered that 43 per cent is exported as Liquefied Natural Gas, 32 per cent is re-injected for enhanced oil recovery and other operational uses like fuel gas, while seven per cent of total gas production is currently being flared.

Operators believe that the percentage that is being flared can be utilised, as the Programme Manager, Nigerian Gas Flare Commercialisation Programme, Federal Ministry of Petroleum Resources, Justice Derefaka, stated that the NGFCP initiative would not only further reduce gas flaring but would generate approximately $3.5bn of inward investment.

He noted that the potential Gross Domestic Product impact of the initiative was estimated at plus $1bn per annum.

“Once it (NGFCP) starts, it has the potential to unlock two to three LNG trains, around 3,000 megawatts of electricity generation, as well as generate about 600,000 metric tonnes of Liquefied Petroleum Gas per year, giving six million households access to clean energy through LPG,” he stated.

Operators said flared gas could be put to use, as Nigeria had a robust and rapidly evolving demand base.

They noted that through the  National Gas Policy and the Nigerian Gas Master Plan, the Federal Government had continued to focus its efforts to unlock the vast gas resources through reducing gas flaring, increasing domestic supply and utilisation while diversifying Nigeria’s economy.

One of the IOCs involved in the quest to end gas flaring across the country, Chevron Nigeria Limited – operator of the joint venture between the NNPC and CNL, explained that its investments in gathering and processing of associated gas had made routine flaring to reduce by over 90 per cent in the last 10 years in CNL’s operations.

The Chairman/Managing Director of CNL, Jeff Ewing, said Chevron had contributed immensely to the Nigerian government’s gas master plan through the various gas projects it embarked on.

In a document made available to our correspondent by the IOC on some of its activities in the oil and gas sector, Ewing said, “Amidst the growing global trend in gas production and utilisation, the expectations for the gas sector in Nigeria remain high and provide opportunities for investment in the sector.”

He noted that the opportunities include transitioning from an oil-based economy to a more integrated oil and gas economy and end routine gas flaring;  deliberate exploration for non-associated gas to support the Nigeria Gas Master Plan, with a focus on high liquid yield non-associated gas resources to optimise the gas development project economics.

Other opportunities include removing constraints in the gas to power value chain to increase investor confidence, and supporting and enabling competitive willing-buyer willing-seller gas pricing model across the chain to enable stakeholders to cover their costs and be guaranteed a return on investment.

Ewing explained that the company’s gas story began with the implementation of different phases of the Escravos Gas Project with four phases of development over the years.

He stated that the EGP gas gathering and processing facilities placed CNL as one of the pioneers in creating an economic solution for gas flaring in the Nigerian oil and gas industry.

“Also CNL’s Sonam Field development facility is designed to process natural gas through the EGP and is expected to deliver a total of 300 million cubic feet of natural gas per day to the domestic gas market and produce over 30,000 barrels of combined LPG and condensate per day,” the Chevron boss stated.

He stated that the strategy includes ending routine gas flaring, boosting domestic supply diversifying and commercialising gas resources through gas-based industries such as its Escravos Gas-to-Liquid plant.

He said, “CNL works very closely with our JV partner, NNPC, pertinent government agencies and industry stakeholders to advance domestic gas supply.

“Very notable are the Gas Sale and Aggregation Agreement with Egbin Power Plc and, more recently with Dangote Fertiliser Limited, Ibeju-Lekki.”

Authored By: Okechukwu Nnodim

SOURCE: PUNCH

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