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Four ways gas flare sale programme will enhance Nigeria’s energy security – Derefaka

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Nigeria’s gas flare commercialisation programme will contribute to energy security in Africa’s largest economy by growing demand for gas based solutions, creating enabling technology, grow midstream players and increasing environmental awareness, Justice Derefaka, programme manager, Nigeria’s Gas Flare Commercialisation Programme (NGFCP) has said.

In a presentation at the third edition of Lawyers in Oil and Gas Conference held in Lagos on May 7, Derefaka said that the growing global demand for energy fuelled by rising population will make energy security a priority of many countries. Global population is expected to reach 10billion by 2050 with 67 percent living in cities. As fossil fuels decline, more gas investments would be required to complement renewables.

“An increase in energy demand which will be driven by economic growth, and as people seek to improve their quality of life, this will require a secure energy source. Even assuming significant future energy efficiency gains, global energy demand is expected to grow by 30% between 2015 and 2040 quoting IEA New Policies Scenario,” Derefaka said.

To prepare the country for this future, Derefaka said the gas flare commercialisation programme had been developed to meet an anticipated gas demand projected to grow from industrial and domestic LPG demand. Gas will be heavily demanded by industries for plastics, fertilizer and power and demand for clean cooking will drive uptick in demand for LPG.

Another result that the country could gain from the NGFCP is improved technology through iintroduction and refinement of new end-use technologies for example GTL and small scale LNG. It will also reduce costs and eliminate barriers that fosters decline in the cost of CNG compressors.

Derefaka also said the programme will encourage new midstream players in the Nigerian gas industry allowing inflow of new infrastructure players to enable gas uptake and usage in previously unreachable regions. This will drive business development from gas companies to unlock new domestic markets for gas leading to improved energy security for Nigeria.

Nigeria is a signatory to Global Gas Flare Reduction Partnership (GGFRP) which works to increase use of natural gas associated with oil production. Nigeria is a part of the COP agreement, committed to emission reduction and cleaner energy. Derefaka stressed that these goals will be enhanced by the success of the NGFCP.

There are currently over 16,000 flare sites in 90 countries all over the world with over 150BCM gas flared annually. This is enough to produce 750 billion kWh power which is more than the entire power consumption on the African continent annually.

Despite a 70% decline in flaring over the past decade, in 2015, around 1,000 MMSCFD of gas was flared in Nigeria, exceeding around 800 MMSCFD utilized for power generation and around 450 MMSCFD utilized in domestic industry. Nigeria has the world’s 7th biggest gas flare with about 172 flare sites.

The NGFCP seeks to abolish gas flaring by raising fines and providing an incentive for investors to use flared gas. Under the new regulations, the Federal Government has asserted its right to take gas free at the flare and will auction it off to third parties.

According to Derefaka, the strength of the NGFCP is that it leverages institutional leadership and oversight to drive reform priorities and provide early warning to policy makers of regulatory issues that need to be fixed.

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