Nigeria’s gas flares have declined by 52 percent from 2018 to 2022 largely due to lower oil exploration and gas production activities, according to data from the Nigeria Gas Flare Tracker (GFT), a satellite-based technology created by NOSDRA.
According to GFT, Nigeria flared 471 billion standard cubic feet (scf) in 2018, 465 billion scf in 2019, 353 billion scf in 2020, 260 billion scf in 2021 and 224 billion scf in 2022.
The decline in flared gas volumes is helping Nigeria record positive momentum in keeping with its climate commitment to meet its net-zero emissions target by 2060.
Oil and gas experts who spoke with BusinessDay phone placed the decline in gas flaring on low oil production. They also say improved use of associated gas is contributing to the decline in gas flare volumes.
“As oil extraction declines, gas flaring will automatically decline as the process of oil extraction leads to the discovery of associated gas (flared gas),” said Olufola Wusu, partner and head of oil and gas at Megathos Law Practice.
“Meanwhile, the Nigerian Gas Flare Commercialisation (NGFCP) 2022 Programme, recently launched, may help reduce the flared gas amount further if all goes as planned.”
The NGFCP 2022 programme aims to eliminate gas flaring through technically and commercially sustainable gas utilisation projects developed by competent third–party investors who will be invited to participate in a competitive and transparent bid process.
Last week, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said the NGFCP programme will generate revenue, increase investment inflow and create jobs in the country as it phases out gas flaring.
Gbenga Komolafe, NUPRC’s chief executive, at the NGFCP 2022 Bidders Conference & Investors Forum, said the programme will end the wanton wastage of the country’s premium economic resource.
“As fossil fuel becomes less popular due to climate change, natural gas has assumed a stature of significant importance as the bridging fuel for many oil and gas producing nations,” he said.
Kelechi Chidi-Ihuoma, senior investment analyst at Meristem Securities Limited, said the lower gas flares volumes are due to companies channelling it into a system to power plants.
“Most plants found in oil fields are usually powered by gas. Some companies use that gas to generate the electricity they transmit to neighbouring communities as their Environmental, Social, and Governance (ESG) project or corporate social responsibility,” she said.
“However, companies that do not have any use for this gas flare it because there is no infrastructure to channel it for utilisation.
For Jide Pratt, chief operating officer of Aiona and country manager of Trade Grid, the decline in flared gas is due to reduced oil production drilling activity.
“However, until we can commercialise or appropriately price gas, the incentive not to flare gas ordinarily will be low,” Pratt said.
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In addition, the Nigeria Liquefied Natural Gas (NLNG) Limited utilises gas that upstream companies would otherwise flare.
According to NLNG’s facts and figures report for 2022, the company has converted about 7.07 trillion cubic feet of associated gas to exports as LNG and natural gas liquids, thus making significant contributions to the nation’s income.
“NLNG has, in this way, contributed to reducing gas flaring from 65 percent in 2001 to less than 20 percent,” the report said.
According to Wusu, the Petroleum Industry Act (PIA) gives NUPRC the right to take free-of-charge natural gas that is destined for flaring at the flare stack.
“The NGFCP is backed by law to take gas about to be flared. Operators of oil and gas assets may be beginning to capture and liquefy flare gas due to commercial benefits.
“This is done using micro-LNG modules, compressing flare gas into Compressed Natural Gas (CNG). LPG can be stripped from wet natural gas, piping flare gas to power plants to generate power, or using flare gas as a feedstock for animal feed,” Wusu added.
