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Nigeria second to Russia in global gas flaring

By on July 11, 2013

Nigeria, the highest producer of gas in Africa, loses about $1.789 billion or N286.24 billion to gas flaring annually. Mr. George Osahon, Director, Department of Petroleum Resource, DPR, has said.

Osahon who was represented by his Deputy Director, Gas, Mr. Oliver Okparaojiako, disclosed this Wednesday,  at the Nigerian Gas Association, NGA Business Forum, held in Lagos.

According to him, at the rate of $3.5/1,000 standard cubic feet, scf, the country incurs about $4.9 million or N784 million daily losses from flaring and gas under-utilisation.

“As it is today, oil production stands at 2.5 million barrels per day.

Utilised gas is 6.6 billion bcfd, the rest is flared, which is 1.4 bcfd. If you take this loss at $3.50/1000scf, the average daily loss is $4.8 million, which is close to N789 miilion,” he said.

Already, Nigeria is second to Russia in global gas flaring, according to the World Bank-led Global Gas Flaring Reduction partnership (GGFR), and has remained so over a period of five years between 2007 and 2011.

A report from the bank last year said: “Russia still tops the world’s flaring countries, followed by Nigeria, Iran and Iraq.  The USA is now the fifth flaring country in the world, with some 7.1 bcm of gas flared in 2011.”

It added: “Latest satellite estimates also show some continuous progress in flaring reduction in Nigeria, Algeria, Mexico and Qatar.

These countries need to sustain their flaring reduction and gas utilization efforts.

The revelation comes as the Senate Committee on Gas, expressed concern over the flagrant refusal by oil companies, particularly the International Oil Companies, IOCs, operating in Nigeria to pay the penalties prescribed for flaring Committee Chair, Senator Nkechi Nwogu, in a telephone interview with Vanguard yesterday, said that even the current penalty of $3.5 imposed is not been collected.

“We are going to make it mandatory for the IOCs to report to the regulators, and the regulators would render to the Senate on quarterly basis, the volume of gas flared, the penalty paid and when it is paid and we will investigate when the payment is made,”

As a result, she said the Senate is working on a modality that will lead to the imposition of stiffer penalties on flare violators in the Petroleum Industry Bill, PIB.

“In the PIB document before us, we are going to impose penalty and make sure that violators pay for it, With the PIB before us, we are going to look into the matter and know when and how to stop it,” she said.

She added that the Senate is concerned about the current situation, which makes the IOCs to act with impunity.

Production and utilization Expatiating further on the level of gas production and utilisation in the country, Osahon said that while Nigeria’s oil production remains at 2.5mpd, gas production is about 8.0 bcfd. Associated Gas (AG) production is about 5.20 bcfd, while Non Associated Gas (NAG) production is about 2.80 bcfd.

He, however, noted that in post-PIB, there would be future exploration for gas in new frontiers such as Anambra and Benue trough.

“Exploration efforts in the Chad Basin, Anambra basin and Benue trough shows that inland basins have potentials to add to national gas reserves,” he said.

He further said that problem of gas distribution network would soon be solved, adding that there are three backbone transmission pipelines, namely; South to North pipeline, Western pipeline and Interconnector  pipeline.

 

 

 

[Vanguard]