Monday, May 27Inside Business Africa

Nigeria flared 7.83bcm of gas in 2019, amid poor electricity generation

The World Bank has said that estimates from satellite data show global gas flaring rose to levels not seen in more than a decade, to 150 billion cubic meters (bcm), equivalent to the total yearly gas consumption of sub-Saharan Africa.

The three per cent rise, from 145bcm in 2018 to 150bcm in 2019, was mainly due to increases in three countries: the U.S., up by 23 per cent; Venezuela, up by 16 per cent; and Russia up by nine per cent.

With 7.83bcm last year, up from 7.44bcm in 2018, the World Bank ranked Nigeria as having the seventh-largest volume under the Global Gas Flaring Tracker Report (GCFR), despite having a low level of energy access.

Nigeria’s power sector has continued to suffer setbacks in the last seven months with the loss of about N377.6 billion due to problems associated with the gas supply, and grid infrastructure challenges, as average energy generated hovered at 3,707MW.

This further reiterates the call for the gas-to-power initiative, and the implementation of the 2018 gas flare regulations, which underpin the Nigeria Gas Flare Commercialisation Programme (NGFCP).

Gas flare, the burning of natural gas associated with oil extraction, takes place because of technical, regulatory, and/or economic constraints. It results in more than 400 million tonnes of CO2 equivalent emissions every year, and wastes a valuable resource, with harmful impacts on the environment from un-combusted methane and black carbon emissions.

In the first quarter (Q1) of 2020, the World Bank, however, noted that global gas flare fell by 10 per cent, with declines across most of the top 30 gas flaring countries.

The NGFCP relies on market principles to commercialize associated gas while providing direct benefits to Niger Delta communities by reducing air pollution and creating jobs.

The NGFCP will also contribute to the Nigerian economy by enhancing the delivery of additional volumes of gas to the domestic market for use by various sectors of the economy, and to the global efforts to mitigate greenhouse gas emissions.

In an earlier discussion, the Department of Petroleum Resources (DPR), said plans are underway to commercialise its 96 gas flare points to generate revenue and ensure domestic consumption of gas.

According to the DPR, the move was part of plans to reduce gas flaring in Nigeria, in line with the first phase of the National Gas Flare Commercialisation Programme (NGFCP).
DPR Director, Auwalu Sarki, had earlier this year, told journalists and bidders that the agency has identified 45 out of 178 gas flaring sites in the country, with about 200 companies indicating interest to take over the flare points.

Sarki during an online interactive session with journalists, said although flared gas had maintained a stable profile in Nigeria in the last three years, the take-over of the gas flare points by investors will further reduce the quantity flared and increase domestic utilisation.

With proven natural gas reserves now 203.16trillion cubic feet (tcf) and crude oil reserves now 36.89 billion barrels (bb) as at January 1, 2020, Sarki said the Department has set new targets of 210tcf by 2025, and 220tcf by 2030 for its gas reserves, going by new discoveries.

Sarki noted that the COVID-19 pandemic had caused a setback for the agency in allocating the flare sites, as investors could not access the sites due to the lockdown measures and movement restrictions across the states.

In identifying and commercialising flared gas, Sarki explained that the DPR accounts for gas by deploying production meters, fiscal meters, and allocation meters.

According to him, the fiscal meters help us to monetise the gas produced or flared, while the allocation meters help to measure the utilisation of the gas produced.

Gas flare in fragile or conflict-affected countries increased from 2018 to 2019: in Syria by 35 per cent and in Venezuela by 16 per cent despite oil production flattening in Syria, and dropped by 40 per cent in Venezuela.

“Our data suggest that gas flaring continues to be a persistent problem, with solutions remaining difficult or uneconomic in certain countries,” said Christopher Sheldon, Practice Manager in the Energy & Extractives Global Practice, World Bank.

“The current COVID-19 pandemic and crisis bring additional challenges, with sustainability and climate concerns potentially side-lined. We must reverse this worrying trend and end routine gas flaring once and for all.”

Zubin Bamji, program manager of the World Bank-managed GGFR Trust Fund assured that the World Bank and GGFR are committed to working with governments and industry to end this ‘sticky’ problem.

“We are working in many of the highest gas flaring countries in the world, helping them develop policies, regulations and practices to end routine flaring. At the same time, we are garnering more commitments from governments and companies to end routine flaring through the Zero Routine Flaring by 2030 initiative. Now over 80 governments and companies, accounting for over half of the world’s routine flaring, have pledged to end this 160-year-old practice,” Bamji stated.

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