Lagos — Despite the federal government gas commercialisation initiative targeted at eradicating gas flaring by 2020, statistics showed that approximately 91 billion standard cubit feet, scf of gas was still lost to the menace in five months.
Data from the state oil firm, Nigerian National Petroleum Corporation, NNPC, revealed that both the federal government and oil companies operating in-country flared 90.9 billion scf from January to May 2020.
A breakdown showed that
19.95 billion scf of gas in January; 18.27 billion scf in February; 19.71 billion scf in March; 17.90 billion scf in April, and 15.07 billion scf in May were flared.
While Nigeria targets to end gas flaring in 2020, statistics from NNPC’s full monthly financial and operational report for April 2020- under the ‘Natural Gas Off take, Commercialization & Utilization’ puts the country’s gas flare rate at 7.9 percent.
The NNPC said a total of 1.30 billion scf per day of gas was supplied to the domestic market and 3.33 billion scfd was supplied to the export market in May.
“This implies that 61.97 percent of the average daily gas produced was commercialised while the balance of 38.03 percent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 6.50 per cent for the month under review i.e. 486.19 million scfd,” it said.
Out of the 1.30 billion scfd of gas supplied to the domestic market in May, about 833.95 million scfd, representing 64 percent was supplied to gas-fired power plants while the balance of 469.15 million scfd or 36 percent was supplied to other industries.
The federal government had said gas flare penalty payment would increase to N103.51bn this year, according to the Director-General, Budget Office of the Federation, Ben Akabueze.
He explained that government would “tighten implementation of the 2018 revised gas flare penalty payment regime (resulting in upward revision of gas flare penalty for 2020 from N44.7bn to N103.51bn)”.
To this effect, the revised penalty payment for gas flaring lists that while oil firms producing 10,000 barrels of oil or more per day would cough out $2 per 1,000 scf compared to N10 per 1,000 scf in the past, those producing less than 10,000 barrels of oil per day will pay $0.5 per 1,000 scf.
Although the federal government promises to end flaring by 2020 however the COVID19 pandemic had slowed down work as workers were unable to go to site. Recent document seen by SweetcrudeReports now pushes target further.
According to the World Bank, gas flaring costs the global economy US$20 billion in 2018.
In Nigeria, the PricewaterhouseCoopers, PwC estimates that Nigeria’s economy lost N233 billion to gas flaring, which translates to 3.8 percent of the global total costs in 2018.
A report published by SweetcrudeReports in June had chronicled a loss of 22,300 Gigawatts-Hour (GWH) of electricity from January to June as a result of same flaring.
The data sourced from the National Oil Spill Detection and Response Agency, NOSDRA revealed that majority of the flares which occurred onshore accounted for 60.95 percent of total gas flared, while offshore sites accounted for 39.05 percent.
It stated that the 135.8 billion SCF of gas flared onshore, is valued at $475.5 million, an equivalent of N171.18 billion; would fetch a penalty of $271.7 million, an equivalent of N97.81 billion; translated to 7.2 million tonnes of CO2 emissions.
It added that the 87 billion SCF of gas flared offshore between January and June 2020, cost the country a loss of $304.4 million, an equivalent of N109.58 billion, in revenues; would lead to a penalty of $174 million, an equivalent of N62.64 million; CO2 emissions of 4.6 million tonnes and an equivalent of 8,700 GWH of electricity.
Delta State suffered hugely from gas flaring in the six-month period having accounted for 38.4 per cent of total gas flared onshore and 23.4 per cent of total gas flared offshore.
According to the report,52.2 billion SCF of gas was flared by the oil and gas companies operating in Delta State, translating to CO2 emissions of 2.8 million tones and an equivalent of 5,200 GWH of electricity.
It added that the volume of gas flared in the state is valued at $182.6 million and would fetch the companies, penalties of $104.4 million.
Rivers State followed with 38.5 billion SCF of flared gas, valued at $134.9 million; Bayelsa recorded gas flare totaling 27.1 billion SCF valued at $94.7 billion; while 9.9 billion SCF of gas was flared in Edo state, at the value of $34.5 million.
Imo recorded 6.0 billion SCF of flared gas valued at $21.1 million; Akwa Ibom 1.8 billion SCF, valued at $6.3 million; Abia 357.5 million SCF valued at $1.3 million and Anambra, 23.2 million SCF valued at $0.08 million.
It noted that at onshore sites, 23.66 billion SCF of gas, 17.51 billion SCF, 20.39 billion SCF, 23.67 billion SCF, 26.49 billion SCF and 24.12 billion SCF were flared in January, February, March, April, May and June 2020 respectively.
It further noted that at offshore sites, t 16.37 billion SCF of gas, 14.64 billion SCF, 17.21 billion SCF, 15.17 billion SCF, 10.49 billion SCF and 13.09 billion SCF were flared, correspondingly, in January, February, March, April, May and June 2020.
Also, 135.8 billion standard cubic feet of gas were flared on the onshore sites in the six months period, while 87 billion standard cubic feet of gas was flared offshore.
The environmental cost of gas flaring amounts to N28.8 billion annually, according to the National Environmental, Economic and Development Study, NEEDS for Climate Change in Nigeria.
As at 2018, Nigeria was listed among top-10 gas-flaring countries in the world, with 7.4 billion cubit feet in 2008. Total gas flared in Nigeria accounted for 6.9 percent of the top-10 gas-flaring countries in 2018.
Nigeria has a proven gas reserves of 201 trillion cubit feet and unproven gas reserves of 600tcf.