Govt, World Bank, firms ally to stop gas flaring

No Comments » January 6th, 2008 posted by // Categories: Energy Development Project




Monday, January 07, 2008              

Govt, World Bank, firms ally to stop gas flaring
By Yakubu Lawal

IN a fresh effort to stop gas flaring in the oil-producing areas of the country, the World Bank is now collaborating with the Nigerian government and multi-national oil companies.

Consequently, major stakeholders recently came together in a newly-created forum for co-operation that would develop a road-map to the elimination of flaring within a realistic time frame.

The work of the committee, which is being facilitated by the World Bank Global Gas Flaring Reduction Partnership (GGFR), aims to be forward looking, act quickly, with a clear deadline and mandate to manage flare reduction in Nigeria.

President Umaru Yar’Adua had at an International Gas Stakeholders Forum in Abuja in November last year, stated that the gas flare outdate is now December 31, 2008 as against January 2008.

A statement issued by the Group General Manager of the Nigerian National Petroleum Corporation (NNPC), Dr. Levi Ajuonuma, said high-level representatives from several ministries and sector companies had agreed at the meeting to establish an ad-hoc “Flare Reduction Committee” to reduce routine flaring to a minimum within the shortest possible time-frame.

Other resolutions listed by Ajuonuma include full commitment to the elimination of routine gas flaring and exploring already identified new opportunities for increasing gas utilisation that would address gas flaring in the medium and long-range.

“They also agreed that all must work together to address the issues that inhibit reducing flaring at a much faster rate.” he stated.

The stakeholders’ committee has representatives from the Ministry of Energy (Gas) – who will serve as the Chairman, Ministry of Energy (Petroleum), Ministry of Finance, Department of Petroleum Resources (DPR), National Planning Commission, Special Advisers to the President on Petroleum, Revenue Mobilisation Allocation and Fiscal Commission and representatives of the states.

Other members are drawn from Resource holders, Addax Petroleum Development, Nigerian Agip Oil Company, Chevron/Texaco Nigeria Limited, ExxonMobil Nigeria, Pan Ocean, Shell Petroleum Development Company, Total Nigeria Limited, Nigerian National Petroleum Corporation (NNPC), its subsidiary, National Petroleum Investment Management Services (NAPIMS).

Ajuonuma explained that the flare reduction committee, which meets in Abuja almost on a weekly basis, is currently working with consultants in the preparation of assessments on the environmental, health and financial impacts of ending or continuing routine gas flaring in Nigeria after December 2008.

“The government and industry remain fully committed to the elimination of routine flaring, and we share responsibility for not achieving bigger results. Some progress in flaring reduction has been achieved but it is clearly not enough,” Minister of State for Energy (Gas), Mr. Emmanuel Olatunde Odusina, said.

He added: “That’s why we have created this flare reduction committee to come up with a road-map for elimination of routine flaring within a realistic time-frame in a joint effort by government, industry and other stakeholders so we can attain bigger gas flaring reduction.”

According to the NNPC image-maker, some of the major inhibitors to a faster gas flaring reduction in Nigeria include lack of adequate infrastructure to transport the gas, inequitable gas pricing, lack of capital for gas utilisation projects, security issues in the Niger Delta and so on.

The NNPC said further that the stakeholders have carried out a review of each company’s flare reduction programme to agree whether any acceleration is realistic and, where possible, agree on how this can be achieved.

They also assessed health and environmental consequences of continuation of routine flaring and how to integrate individual company plans into a ‘Nigeria Flare Reduction Plan’ and Nigeria’s Gas Master Plan.

He said the stakeholders also look for opportunities for co-operation between operators and for demand clusters, and amend the flare reduction plan as required following agreement with all stakeholders and to develop and implement a communication strategy that clearly lays out how and when flare reduction will take place.

In the process of oil production, Nigeria flares about 24 billion cubic metres (or 0.84 trillion cubic feet) of associated natural gas every year. The World Bank’s GGFR estimates that globally, 150 billion cubic metres (or 5.3 trillion cubic feet) of associated natural gas are being flared and vented yearly. That is equivalent of 25 per cent of the United States’ gas consumption or 30 per cent of the European Union’s gas consumption per year. It is also estimated that global gas flaring releases about 400 million tonnes of carbon dioxide per year into the atmosphere. This is almost all potential yearly emission reductions from projects currently submitted under the Kyoto Protocol.

Last December during a Global Forum on Flaring Reduction and Gas Utilisation organised by GGFR in Paris, the World Bank called on oil producing countries and companies to step up efforts in reducing the flaring of natural gas as a way of mitigating the impact of climate change and lowering greenhouse gas emissions.

According to the manager of the GGFR partnership: “We certainly hope that by working together within the Flare Reduction Committee, government and operators in Nigeria will be able to achieve more important reductions in gas-flaring in the next years. No doubt that GGFR will support these efforts.”

In a related development, Russia’s gas export firm, Gazprom, is in talks with Nigeria to spend up to $2.5 billion (N259.6 billion) on developing its vast natural gas reserves, a senior Nigerian gas official said at the weekend.

In a similar development, UK-based companies, BG Group and Centrica, have also proposed multi-billion dollar investments in Nigerian gas, said the official who asked not to be named because he is not allowed to speak publicly on behalf of the government.

According to Reuters report at the weekend, the Russian company is on a global hunt for new reserves and has emerged as one of the leading suitors to Africa’s top energy producer as it reforms its gas sector.

“Gazprom has come twice to visit the Federal Government. They want to invest in Nigeria in gas exploitation, gathering and processing,” Reuters quoted a senior Nigerian government official working on gas policy as saying.

Gazprom has offered to invest between $1 billion and $2.5 billion to begin with, he reportedly added.

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