OTC: Nigeria changes gas flaring deadline

Uchenna Izundu
OGJ International Editor

HOUSTON, May 7 -- Nigeria is considering its new zero gas flaring target as 2011, which is 3 years later than its previous deadline of Dec. 31, 2008.

Speaking May 5 at the Offshore Technology Conference in Houston, Hon. Igo Aguma, chairman of the House of Representatives Committee on Gas, said the date had been requested by Nigerian National Petroleum Corp.(NNPC).

Aguma told reporters, "We are all aware that there is currently a gas utilization program ongoing to support the power industry. We also know the capacity of the industry to receive the gas that is being flared. So, projects need to go on before we can have a zero flare-out date."

But achieving this target requires investment by the industry and NNPC has struggled to meet its share of funding for joint venture projects in Nigeria that would build the pipelines and gas gathering systems to stop the flaring. Shell Petroleum Development Co. has previously said that it cannot meet the flaring deadline as the government has not met its financial obligations.

Aguma said it would take at least 2 years to establish the facilities needed to transport associated gas from the oil fields to demand centers.

However, operators are sceptical that even the 2011 date could be met, suggesting instead that 2013 would be feasible. One said before any progress could be made it was necessary to stop disruption of constructing gas projects in the Niger Delta and that the government provided adequate funds to finance its equity in these projects.

Billy Agha, acting director of the Department for Petroleum Resources (DPR), threatened to penalize oil firms who failed to stop flaring after December's deadline, but this has not stopped the problem. The DPR has not published a list of the fields that it has shut down and environmentalists have complained that the government prefers profit—this would be reduced if it shut the oil wells to collect the gas.

Since 1984 when Nigeria first declared it would end gas flaring, it has repeatedly changed the target date citing problems in the Niger Delta and a lack of cooperation by operators. Gas flaring is wasteful and damaging to the environment with the country losing $2.5 billion/year. Nigeria lacks the pipelines and gathering systems to harness the gas for the domestic market, which is one of the reasons why the government is determined to develop a major market under its Gas Master Plan.

According to estimates by the World Bank, Nigeria is one of the worst culprits in the world in flaring. It flares 40% of the gas it produces and reinjects 12% to enhance oil recovery (OGJ Online, Nov. 3, 2008). In 2007, Nigeria did make some improvement in lowering its flaring, according to the report by the US National Oceanic and Atmospheric Administration.

Contact Uchenna Izundu at uchennai@pennwell.com.

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