Nigeria: N149bn revenue lost to gas faring in 11 months

Local fisher-men maneuver their canoe past an oil installation flaring gas in the background.

*Local fisher-men maneuver their canoe past an oil installation flaring gas in the background.

Ike Amos

01 January 2016, Sweetcrude, Abuja – Using the Nigerian Gas Company’s average natural gas price of $3 per 1,000 cubic feet of gas, Nigeria loses $746.37 million, an equivalent of N149.27 billion to gas, as oil and gas companies in the country flared 248.79 billion cubic feet (BCF) of gas in 11 months, between January and November 2015.

The amount of gas flared within this period, according to the Nigerian National Petroleum Corporation, NNPC, in its Monthly Financial and Operations Report for November 2015, represented 9.37 per cent of the total gas production of 2.656 trillion cubic feet of gas.

This was in spite the challenges and dangers posed by global warming and international efforts at putting an end to gas flaring. The Department of Petroleum Resources, DPR, and the NNPC had over the years paid lip service to the issue of gas flaring, while sanctions meted out to defaulting companies had been seen by stakeholders as merely a slap on the wrist.

The report stated that total commercialized gas stood at 1.496 trillion cubic feet (TCF), while 1.134 TCF of gas was not commercialized.

In the commercialized gas segment, according to the report, total gas supply for the period January to November 2015 stands at 346.28 BCF and 1.149 trillion cubic feet for the domestic and export market respectively.

The report stated that, “For the period January to November 2015, a total of 2.656 TCF of gas was produced representing an average daily production of 7.951 billion standard cubic feet per day (scfd) during the period.

“Production from Joint Ventures (JVs), Production Sharing Contracts (PSC) and NPDC contributed about 69.89%, 21.88% and 8.22% respectively to the total national gas production.”

Giving a breakdown of total gas commercialization and utilization for January to November, the report stated that 232.06 billion cubic feet (BCF) was utilized domestic gas to power; 114.22 BCF was for domestic gas to industry, bringing total domestic gas supply to 346.28 BCF.

On the export segment, 20.39 BCF was for export through the West African Gas Pipeline; Escravos Gas to Liquid (EGTL) – 57.57 BCF; Natural Gas Liquid/Liquefied Natural gas Export (NGL/LPG) – 78.99 BCF; Nigeria Liquefied Natural Gas (NLNG) – 992.55 BCF, bringing total volume of gas exported to 1.15 trillion cubic feet.

On the other hand, of the 1.134 TCF of non-commercialised gas, the report stated that 750.7 BCF of gas was re-injected; 134.54 BCF was used as fuel gas while 248.79 BCF was flared.

In its analysis for the month of November 2015, the NNPC report stated, “A total of 247.22 billion standard cubic feet (BCF) of natural gas was produced in the month of November 2015 translating to an average daily production of 8.24 billion standard cubic feet per day (bscfd).

“Out of the 247.22 BCF of gas produced in November 2015, a total of 142.26 BCF of gas was commercialized comprising of 33.03 BCF and 109.23 BCF for the domestic and export market respectively. This translates to an average daily supply of 1,101.04 mmscfd of gas to the domestic market and 3,641.03 mmscfd of gas supplied to the export market.

“This implies that 57.97% of the total gas produced was commercialized while the balance of 42.03% was either re-injected, used as upstream fuel gas or flared. Gas flare rate was 9.48% for the month of November 2015, that is, 775.1mmscfd compared with the 2015 year-to-date (YTD) average flare rate of 9.48%, that is 746.26 mmscfd.

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