Royal Dutch oil giant, Shell in a rare demonstration of commitment to end gas flaring has said it will make significant investment in Nigeria’s vast gas sector that is largely flared.
Experts said Nigeria flares about 1.2 billion cubic feet of gas a day (bcf/d), which could fuel about; 7000MW of efficient thermal electric power, over 1,400 agro-processing facilities, 350 textile plants, 70 fertilizer plants with opportunities for creating over one million jobs.
This amount of gas flare represents 12.5 percent of all globally flared gas.
In 2014, Nigeria lost about $1billion as oil companies operating in the country flared a large proportion of the gas produced from January to September 2014.
According to data from the NNPC, about 295 billion standard cubic feet (scf) of natural gas was flared in the nine-month period. I
International oil companies and indigenous players burnt a total of 43.7billion scf in January, 50.1 billion scf in February and 38.3 billion scf in March.
In April, 22.3 billion scf of gas was flared; 19.7 billion scf in May and 23 billion scf was wasted in June.
In July, 29.1 billion scf was flared; 39.1 billion scf in August; 29.5 billion in September; and 44.37 billion in November.
According to the NNPC’s Monthly Petroleum Information, in December 2014, Nigeria lost $133.716million, which is about N26.743billion to gas flaring, as oil and gas companies in the country flared 20.11 per cent of their total gas production.
Specifically, the oil and gas companies produced 221.634 billion scf of gas, utilised 183.78 billion scf and flared 44.573 billion scf.
The Nigerian Gas Company (NGC) put the average price of gas at $3 per unit of 1,000 scf, translating, to $133.716 million for 44.573 billion scf flared, and $551.346 million for 183.783 billion scf utilised.
If 1.2 billion scf flared per day which has the potential to generate up to 7000MW of electricity, the aggregate gas flared for 2014; about 376.41billion scf can translate into 21.97GW, in addition to its inputs in agro processing, textile plants, fertiliser plants, and the number of jobs created from the multiplier effect said Emeka Okwuosa, Group Managing Director Oilserv Ltd.
However, it was a cheering news to hear the managing director of Shell’s joint venture in Nigeria say the oil major would focus its future investments in the country on natural gas for domestic consumption and export.
“Our strategy is to invest a lot more in gas, for domestic consumption and export.
We want to grow our deep water and constrain our onshore oil production,” Osagie Okunbor said.
Shell has been divesting onshore oil-producing assets for the last few years and completed another set near the end of March.