National Daily

Nigeria loses $72bn to gas flaring

By OLAYEMI OGRIKI

THE Nigerian Gas Association (NGA), at it's 2nd quarter business forum last week said Nigeria has lost about $72 billion to gas flaring from 1960 to 2006 at an average of $2.5 billion per annum. This was disclosed by the association's President, Engr. Chris Ogiemwonyi citing industry data, that Nigeria still flares and average of 1.2 trillion cubic feet of gas annually. He said after 50 years of oil production in Nigeria, most of the country's producing oil fields are ''characterised by routine flares with little visible efforts to take out the flares in the near future and also that "Operators have consistently feared the risk of oil shut-in when asked to implement gas flare down date of 31st December 2008".

Engr. Ogiemwonyi, who also doubles as the Group Executive Director, Exploration and Production of the Nigerian National Petroleum Corporation (NNPC), explained that the wider effect of the environmental, economy and social consequences are factored into this estimation. We could potentially be discussing numbers in the region of $150 billion in real terms.
"I have also heard the comparison that compliance to the deadline amounts to only a conservative $800 million in gas revenue in 2008. Further, it has also been said that the proposed tax of $3.5 per a million standard cubic feet of gas flared is punitive and counter-productive “he added.

Ogiemwonyi, who is also the immediate past Managing Director of the Nigerian Gas Company (NGC), said what Nigeria needs is capital project implementation towards gas flare down as demonstrated by Nigeria's Liquefied Natural Gas, Condensate recovery, gas gathering and gas re-injection project among others, but oil producing companies have claimed in 2008 alone that about 870,000 barrels of oil will be shut-in amounting to a revenue loss of about $12.08 billion.

"But we need to realize likewise that government has a responsibility to conserve for the futures generation and not allow a waste that cannot be justified against economic data available to us", Ogiemwonyi stated.

He said what "We expect that operating companies will quickly align with government in realising the Nigerian gas master plan and vision the master plan as the catalyst to realising that potential of gas as a great enabler towards Nigeria's growth aspirations", he said.

To reiterate this, the Minister of State for Energy (Gas), Mr. Emmanuel Odusina, stated that in the Nigeria gas master plan, there is a proposal for three backbone gas transmission system for Nigeria. He added that the backbone would be operated independently, but would be interconnected to form a gas grid which includes the South-North transmission system comprises of 1135 km of 45-inch pipeline system originating from Akwa-Ibom/Calabar Central Processing Facility (CFP), traversing Abia, Ebonyi, Enugu, Kano and Kaduna State via Ajaokuta and Abuja", he said.