Nigerian economy loses N29bn in one month to gas flaring
Oil and gas companies operating in Nigeria flared 31.68 billion standard cubic feet (SCF) of gas in the month of January 2018, translating to a loss of $95.04 million, about N29.46 billion to the country.
According to data obtained from the Nigerian National Petroleum Corporation’s, NNPC, January 2018 Monthly Financial and Operations Report, the volume of gas flared in January 2018 was 0.63 percent lower than the 31.88 billion SCF flared in December 2017.
Using an average gas price of $3 per 1,000 SCF of the commodity, and an average exchange rate of N310 to a dollar, 31.68 billion SCF of gas flared translated to a loss of N29.46 billion.
The report noted that the volume of gas flared represented 12.51 percent of total gas produced by the oil and gas companies in the month under review.
Giving a breakdown of total gas utilization in the period under review, the report declared that total domestic gas supply stood at 34.01 billion SCF, accounting for 13.53 percent of total gas supply in January 2018, with domestic gas to power and domestic gas to industry accounting for 22.66 billion SCF and 11.35 billion SCF respectively.
In addition, the volume of gas exported in January 2018 rose by 10.78 percent to 110.18 billion SCF, compared to 99.46 billion SCF recorded in December 2017.
In its analysis of gas export, the report pointed out that 1.21 billion and 4.40 billion SCF of gas was exported through the West Africa Gas Pipeline and Escravos Gas to Liquid project; Natural Gas Liquid/Liquefied Petroleum Gas export stood at 2.04 billion SCF, while 102.52 billion SCF of gas was exported through the Nigerian Liquefied Natural Gas, NLNG.
However, non-commercialised gas dropped by 9.72 percent from 99.41 billion SCF in December 2017 to 109.07 billion SCF in January 2018.
In the area of non-commercialised gas, the report explained that 66.48 billion SCF was re-injected; 10.92 billion was used as fuel gas, while 31.68 billion SCF of gas was flared.
“This implies that 56.93 percent of the average daily gas produced was commercialized while the balance of 43.07 percent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 12.51 percent for the month of January 2018. That is, 1.021 billion SCF per day, compared with average gas flare rate of 10.18 percent, that is, 780.15 million SCF per day, for the period January 2017 to January 2018,” the report noted.
The report added that total gas supply for the period January 2017 to January 2018 stood at 3.045 trillion SCF, out of which 425.96 billion SCF and 1.338 billion SCF were commercialized for the domestic and export market respectively.
The report further explained that gas re-injected, fuel gas and gas flared stood at 1.282 billion SCF.