Nigeria's Long Road To Zero Gas Flaring
For years, Nigeria has classified oil as gold and the natural gas is often relegated to the background as copper; a waste product either to burn off at the wellhead or flared, rather than being removed by alternative means such as subterranean re-injection or confinement to storage tanks for eventual sale. Thankfully, Nigeria is underway to develop these “stranded gas” for economic gains.
Nigeria has the world’s ninth-largest and Africa’s largest natural gas reserve, with a current reserve estimated to be over 180 trillion cubic feet (TCF) of associated and non-associated gas — most of which are largely unexploited.
Under the National Gas Policy, the country has onboarded various programs like the Nigerian Gas Flare Commercialisation Programme (NGFCP), Nigerian Gas Transport Network Code (NGTNC) and the Domestic LPG Penetration to enhance gas supply and oil recovery, drive reserve growth, champion high gas value export, minimize gas flaring, improve gas-fired power generation, dimethyl ether (DME), and gas-to-ethylene syntheses.
On the road to zero gas flare, the Nigerian government has awarded flare sites to competent third-party companies with proven technical and financial capability to monetize the gas.
Through the various programs, the country is looking to monetize natural gas in her Brass LNG plant; Nigeria LNG plant; Escravos GTL plant; Bonny Non-Associated Gas plant; West Niger Delta LNG plant, Olokola LNG project; Nigeria Gas Company and Bonny Island Gas and Power plant. Many of these projects are lagging behind and are yet to become fully operational despite its huge potential of raking in billions via liquefied natural gas (LNG), gas-to-liquids (GTL), compressed natural gas (CNG), gas-to-power (gas-fired power generation), and gas-to-solid (gas hydrates).
Located in Cross River, the Olokola liquefied natural gas (LNG) terminal project which was initiated in 2005 and projected to have a total capacity of 12.6 million metric tons per year (mtpa) or 1.81 billion cubic feet per day (bcfd), for instance, in over 15 years is yet to become operational and have been a source of draining purse for the country. For a project that is meant to improve the country's earnings and better the economy, the Olokola Liquefied Natural Gas (OKLNG) cost the Nigerian government a loss of approximately $9.8 billion.
The same can be said for the Brass Liquefied Natural Gas (BLNG) project in Bayelsa State that was awarded in 2004. The abandoned project has consumed over $1.2 billion and incurred $20 billion in losses due to lack of proper planning and implementation. BNLG is said to have the potential of attracting local and multinational companies when operational, which will enhance the socio-economic development in Brass Island and create about 10,000 jobs.
Averagely, Nigeria loses N217 billion to gas flaring annually. In 2018, Nigeria burned eight billion cubic meters of gas, three times less than 15 years ago and in 2019, the total value of gas wasted through flaring reached over $19 billion. If properly harnessed, the country can earn millions of dollars by exploring and fully utilizing its large volumes of natural gas.
Worthy of mention is the successful completion of the Bonny Island Gas and Power project located in Oil Mining Lease (OML) 102 in the Nigerian offshore. Bonny's Ofon Phase 2 Project was awarded to the Nigerian National Petroleum Corporation (NNPC, 60%) and Total (40%). Designed to monetize the gas by piping 106 million standard cubic feet of gas per day to the NLNG plant at Bonny Island and develop additional reserves estimated to exceed 350 million barrels of oil equivalent, unlike some other projects, the Ofon phase 2 project has succeeded in reducing the routine gas flaring from the Ofon field.
Despite generating a significant amount of greenhouse gases which are hazardous to the environment, flaring gas is said to be cost-effective, relieve pressure to prevent the risk of explosions and a safe combustion for volatile organic compounds.
As the global economy continues to falter, crude oil prices are collapsing and the demand for environmentally friendly energy is getting louder and LNG has become attractive once again.
