The amount of gas flared in the first six months of 2024 can provide electricity to more than three million homes, BusinessDay’s findings have shown.
An estimated 148.7 million standard cubic feet of gas were flared in the first half (H1) of 2024, according to the National Oil Spill Detection and Response Agency (NOSDRA).
Recent data from the Nigerian gas flare tracker of the National Oil Spill Detection and Response Agency (NOSDRA) showed the country’s flared gas that held a power generation potential of 3,401.83 megawatts (MW).
According to the United States Energy Information Association, one megawatt of electricity can provide electricity to 1,000 households. By implication, the gas flared in the half year of 2024 can provide electricity to at least 3.4 million households.
The value of gas flared stood around $360 million, a potential succour to the foreign exchange woes faced by the West African country.
Read also: Meet 24 Nigerian billionaires in oil and gas industry
Nigeria has been struggling with a prolonged foreign exchange shortage, which has slowed economic growth, depreciated the naira, and worsened inflation.
“The rule of thumb for an industrial nation is about 1MW for every thousand population,” PricewaterhouseCoopers alluded to this in a report entitled, ‘Privatisation in the Power Sector: Navigating the Transition.’
Nigeria has an installed power generating capacity of around 13,014.14MW and an operating capacity of about 4,000MW, according to the Nigeria Electricity System Operator. As a result, power generation remains a significant challenge in Nigeria.
For context, more than 100 million Nigerians lack access to electricity and over 75 percent of the West African nation lacks access to clean cooking energy.
“Despite all the interventions and subsidies, over 100 million Nigerians still do not have access to consistent and affordable electricity,” said Olu Verhejen, special adviser to President Bola Tinubu on energy.
According to her, the lack of access directly impacts citizens’ ability to achieve meaningful income growth, limits productivity and restricts economic expansion.
“The link between electricity consumption and economic development is well established across different countries in different income strata.”
Nigeria, Africa’s largest oil producer, is no stranger to energy challenges. The high spate of blackouts in Nigerian communities highlights the inefficiencies plaguing the country’s energy sector.
A few weeks ago, the national electricity grid experienced a partial collapse, plunging some parts of the country into darkness.
That was the seventh time the country experienced total system collapse in 2024, leading to total blackout in most parts of the country.
Since the grid was privatised a decade ago, it has collapsed over 141 times, highlighting the persistent issues within the power sector.
Read also: KONSTRUCTUM Contracting joins NIPEX to expand oil, gas services in Nigeria
Gas commercialisation
Experts stress the urgent need for gas commercialisation, stricter regulation, development of floating liquefied natural gas (FLNG), and revisions to the Petroleum Industry Act to address these issues.
Preye David Orodu, lead engineer at KEOT Synergy, emphasised the importance of practical efforts towards gas commercialisation, supported by a strong infrastructure network.
Orodu noted that some of the liquefied petroleum gas (LPG) used domestically is imported, adding uncertainty to the supply chain.
“By promoting gas commercialisation, we can attract investment, thereby reducing our reliance on imports,” Orodu said.
For Bala Zakka, an energy analyst, harnessing natural gas, which is a cleaner source of energy, could help to propel investment in gas turbines and generate electricity.
According to him, Nigeria is not doing enough as a member of the Organization of Petroleum Exporting Countries and the Gas Exporting Countries Forum.
Kelvin Emmanuel, energy analyst, emphasised the need to deregulate gas prices to incentivise operators to commercialise gas that is currently being flared, thereby reducing environmental and economic losses.
Read also: Nigeria approves Gas Investment Forum for second edition
Emmanuel said, “The reason this is critical is because if the cost of gas per standard cubic feet is lower than the cost of penalty for flaring, the operators will reject re-injection and opt for the fines.”
To address this, Emmanuel suggested developing floating LNG vessels, which could lower the cost of standard train construction, reduce vandalism risks, and facilitate the offtake of associated gas from well-heads.
According to Emmanuel, this approach would eliminate the need for flaring or re-injection, providing a more sustainable method of gas utilisation.
