Orient Energy Review

NNPC Sets 2020 Deadline for Zero Gas Flaring


THE Nigerian National Petroleum Corporation (NNPC) has set 2020 as the new deadline for zero gas flaring from oil fields. It has also reviewed upwards the penalty for every 1000 standard cubic feet (scf) of flared gas.
Its Group Managing Director (GMD), Dr. Maikanti Baru, announced these measures during a panel session organised by the Petroleum Technology Association of Nigeria (PETAN) at the ongoing 50th Offshore Technology Conference (OTC), in Houston, Texas, United States. Dr. Baru insisted that gas should create value, increase the country’s gross domestic product (GDP) and create jobs for Nigerians as it is in other oil producing countries. Baru explained that the new deadline and the fine regime, became imperative to align Nigeria’s with global standards. He said: “Natural gas has the capacity to transform an economy. We have seen successful examples all the world. Qatar has the world’s highest GDP per capita with its growth anchored on natural gas. Trinidad and Tobago saw transformational changes in its GDP and employment rate as it exploited its modest natural gas resources.
“Saudi Arabia apart from being the world’s largest oil producer, has positioned itself as the world’s hub for petrochemicals, creating significant job opportunities and enabling industrialisation of the country. Russia also leveraged its enormous gas resources, transformed its economy and entrenched its global relevance based on the same. Natural gas can do the same for Nigeria.” The NNPC chief also unveiled a three-point smart strategy aimed at ending gas flaring in the nation’s oil and gas industry.
Speaking on: “Nigeria’s Commercialisation, Prospects & Opportunities,” Baru explained that in the last decade, gas flaring had reduced significantly from 25 per cent to 10 per cent. According to him, the multi-pronged approach adopted by the NNPC would ensure a sustainable solution to the historical problem of flaring, thereby turning waste into wealth.
The three-point strategy include ensuring non-submission of Field Development Plans (FDPs) to the Industry Regulator – the Department Petroleum Resources (DPR), without a viable and executable gas utilisation plan, a move aimed at ensuring no new in current and future projects. Baru at the 2018 Oloibiri Lecture Series and Energy Forum (OLEF) organised by the Society of Petroleum Engineers (SPE) said Nigeria is currently losing N868 million daily to gas flare, adding that oil and gas firms operating in the country are currently flaring 700 million scf/pd. The other two strategies, Baru added, were a steady reduction of existing flares through a combination of targeted policy interventions in the Gas Master-plan as well as the re-invigoration of the flare penalty through the 2016 Nigeria Gas Flare Commercialisation Programme (NGFCP) and through legislation that bans gas flaring via the Flare Gas (Prevention of Waste and Pollution) Regulations 2018. This development, Baru added, would not only see Nigeria dropping from being the second highest gas flaring nation in the world to seventh, it would also signify a major milestone in its gas commercialisation prospects.
“Total flares have significantly reduced to current levels of about 800mmscfd and in the next 1-2 years we would have completely ensured zero routine flares from all the gas producers,” the GMD stated.
According to him, NNPC has embarked on the most aggressive expansion of the gas infrastructure network aimed at creating access to the market. “Today, we have completed and commissioned almost 600km of new gas pipelines thereby connecting all existing power plants to permanent gas supply pipeline. We are also currently completing the construction of the strategic 127km Obiafu-Obrikom-Oben gas pipeline – “OB 3” connecting the Eastern supply to the Western demand centres,” he added. Baru further noted that aside looping Escravos-Lagos Pipeline System (ELPS 2) gas pipeline projects to increase gas volume capacity to at least 2Bcf/day, NNPC has also signed the contracts to kick-off the 614Km Ajaokuta-Kaduna-Kano (AKK) pipeline project, which on completion, would deliver gas to ongoing power plants in the areas and revive the industries in the northern part of the country.
He said there was evidence that the interventions undertaken by the corporation were working as gas supply to the domestic market is growing at an encouraging rate, having tripled from 500mmcf/d in 2010 to about 1500mmcf/d currently. He informed that the aggressive development of gas infrastructure (pipelines and processing plant) between supply sources and the market would also create a sustainable evacuation route for currently flared gas and other gas sources. Speaking during a panel session on New Oil & Gas Horizons and Procurement Procurements in Sub-Saharan Africa, Baru had maintained that huge opportunities abound in Nigeria’s gas sector, with the country expecting over $25 billion investments anticipated the next 10 years.
He described the Nigerian petroleum industry as the largest and the most vibrant in sub-Saharan with lots of potentials, especially in the deep water and untapped gas resources. He noted that Nigeria offers unique opportunities for investment in exploration, refining, storage, transportation; power, distribution and marketing of petroleum products, Baru further observed that the nation’s Gas Reform was anchored on a robust strategic framework that is focused on maximum economic impact through gas.
Chairman of Bank Anthony Okoroafor said the theme of the panel discussion was carefully chosen to enable a robust debate on the prospects and hidden opportunities on flared gas in Nigeria and the plan by the Federal Government to commercialise it