Nigeria flares N4trn worth of gas in 10 years

Nigeria flared natural gas worth over $13.3bn (N4 trillion) within the last 10 years, BusinessDay analysis show, volumes that could have helped dent demand shortage in Europe and meet critical power needs at home.

From 2012 to 2021, the country flared 3.8 billion standard cubic feet (scf) both onshore and offshore, according to the Nigerian gas flare tracker of the National Oil Spill Detection and Response Agency (NOSDRA).

The total value of the gas flared over a decade is valued at $13.3 billion by NOSDRA but converting this into naira at the prevailing exchange rate over the course of 10 years puts the cumulative value at N4 trillion, according to BusinessDay calculations using the average exchange rate in each year.

Ranked seventh on the World Bank index, Nigeria has been able to cut flares by 31 percent between 2012 and 2021, but flare intensity increased by 10 percent in the same period.

The country’s inability to commence the gas flare commercialisation programme approved by the government in 2016 is said to be limiting efforts to end flaring.

The Nigerian Gas Flare Commercialisation Programme (NGFCP) is an ambitious plan to sell over 700 million scf of gas a day flared at 178 different sites.

The NGFCP was established to achieve the government target of eliminating gas flaring in the Niger Delta by 2020. The Petroleum Act of 1969 and Flare Gas (Prevention of Waste and Pollution) Regulations 2018, signed in July 2018, provide the basis for the NGFCP.

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Based on the right of the Federal Government under the Petroleum Act, the NGFCP was designed to offer a series of auction rounds, wherein the Federal Government takes the flare gas at the flare sites, and auctions it to third parties for commercialisation.

The programme has, however, stalled after 203 bidders emerged and little else has been heard about it after the Petroleum Industry Act established a new regulator to take over the sector.

However, other African countries are harnessing their gas potentials. In April, Italy signed a gas supply deal with Algeria. The agreement will see Italy ramp up gas imports from Algeria by around 40 percent in its first major deal to find alternative supplies following Russia’s invasion of Ukraine.

Nigeria, whose proven reserve grew to 209 trillion cubic feet in January 2022, can leverage gas to grow its economy and meet critical needs outside the country.

Collins Obi, an energy specialist, said with the ban on Russian gas by the West, energy security is a front-burner across European countries with the increasing focus on Africa as a major strategic gas supplier.

“Thus, Nigeria needs to position itself for the economic growth opportunity this presents,” he said.

Oreoluwa Owolabi, corporate intelligence lead at GAS360, said the value of gas flaring in Nigeria indicates riches in energy resources but poor energy management and supply.

“We need to invest in infrastructure to distribute the gas to where it would be commercially viable. This could be for export or pipelines across the country for electricity generation,” he said. “It requires a government-led effort, and the government has already taken some steps towards stopping flaring by 2030.”

He said that the international communities are now accepting gas as a necessary fuel.

“This can be used to accelerate Africa’s net-zero transition and there would be more funds available for gas projects, which can partially finance our infrastructure development,” Owolabi added.

Obi commended the Nigerian government on its work to promote gas-to-power initiatives.

“It is noteworthy that the government promotes gas-to-power initiatives, and the approval of the Ajaokuta-Kaduna-Kano (AKK) natural gas pipeline construction remains commendable,” he said.

According to NOSDRA, Nigeria flared an estimated 14 million tonnes of CO2 emitted into the atmosphere contributing to global warming.

The World Bank, in its gas flaring satellite data from 2020, reveals that Russia, Iraq, Iran, the United States, Algeria, Venezuela, and Nigeria remain the top seven gas flaring countries for nine years running since the first satellite was launched in 2012.

“The practice results in a range of pollutants released into the atmosphere, including carbon dioxide, methane, and black carbon (soot). The methane emissions from gas flaring contribute significantly to global warming in the short to medium term, because methane is over 80 times more powerful than carbon dioxide on a 20-year basis,” the World Bank said.

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