Losses from gas-flaring rise to N122bn

*Shell gas flare at Kolo Creek - surrounded by agricultural fields.

*Shell gas flare at Kolo Creek 

17 November 2015, Lagos – Barring other unforeseen arrangements, Nigeria lost about N122.232 billion ($611.16 million) between January and September 2015, as oil and gas companies flared 203.72 billion cubic feet, bcf, of gas.

Using the Nigerian Gas Company, NGC’s average price of gas of $3 per standard cubic feet, scf, and an average naira exchange rate of N200 to $1, flaring of 203.72 BCF gas translates to a loss of $611.16 million.

Specifically, the Nigerian National Petroleum Corporation, NNPC, Monthly Financial and Operations Report for September 2015, revealed that the amount of gas flared between January and September 2015 represented 16.78 per cent of total gas production of 1.214 trillion cubic feet in the period under review.

Giving a breakdown of total gas supply for the period, the report put gas supply in the first nine months of the year at 281 BCF and 933 BCF for the domestic and export market respectively.

In addition, the report said the country earned $1.071 billion, about N214.2 billion from the export of gas between January and September 2015, and earned N19.318 billion from the domestic sales of gas in the period under review.

Further analysis of gas commercialisation and utilisation revealed as follows:

187 BCF allocated to the power sector;
93.23 BCF was allocated to industries;
613.12 BCF was re-injected;
110.27 BCF used as fuel gas,
203.72 BCF flared, and;
927.11 BCF non-commer-cialised gas.
Also, giving an analysis of activities in the gas sector for September, the NNPC said: “Out of the 244 BCF of gas produced in September 2015, a total of 142 BCF of gas was commercialised, comprising 34.10 BCF and 107.86 BCF for the domestic and export market respectively.

“This translates to an average daily supply of 1.137 billion standard cubic feet per day (SCFD) of gas to the domestic market and 3.595 billion standard cubic feet per day of gas supplied to the export market.

“This implies that 58 per cent of the total gas produced was commercialised while the balance of 42 per cent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 8.98 per cent for the month of September 2015, that is, 730 million standard cubic feet per day (mmscfd) compared with the 2015 year-to-date (YTD) average flare rate of 11.78 per cent, that is, 961mmscfd.”

“From the 1.137 billion SCFD of gas supplied to the domestic market in September, about 773 mmscfd of gas representing 68.02 per cent was used for Gas-Fired power plants while the balance of 363 mmscfd or 31.98 per cent was supplied to other industries.

“Similarly, for the period of January – September, an average of 1.028 billion SCFD of gas was supplied to the domestic market comprising an average of 686 mmscfd or (66.78 per cent) as gas supply to the power plants and 341 mmscfd or (33.22 per cent) as gas supply to industries.

“About 3.12 billion SCFD or 86.77 per cent of the export gas was sent to Nigerian Liquefied Natural Gas Company (NLNG) for September 2015 compared with a 2015 YTD average of 2.963 billion SCFD.”
*Michael Eboh – Vanguard

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