Shell, FG in talks to launch Nigerian flare gas commercialisation programme
By In a bold move to reduce the menace of gas flaring, Shell Petroleum Development Company (SPDC) JV is currently in discussions with the Federal Government of Nigeria to launch the Nigeria Flared Gas Commercialisation Programme (NGFCP), which is expected to address some of the gas flaring carried out by the company.
The Federal Executive Council approved the NGFCP in recognition that flared gas could be harnessed to stimulate economic growth, drive investments and provide jobs in oil producing and other communities, through the utilisation of widely available innovative technologies.
As an oil and gas nation, Nigeria has approximately 178 flare sites, flaring hundreds of billions of standard cubic feet (scf) of natural gas each year (in 2015, Nigeria flared 800MMscfpd of associated gas), and losing billions of dollars’ worth of economic potential to gas flaring. The NGFCP seeks to reverse this trend.
According to industry sources, the company plans start up dates for two gas gathering projects which have historically been delayed due to lack of adequate joint venture funding. Nevertheless, with funding now restored, the projects are planned for completion in 2018-19.
Osagie Okunbor, Shell in country chairman and managing director of Shell Petroleum Development Company(SPDC ) said the company continues to make progress in close collaboration with its joint venture partners and the Federal Government of Nigeria towards the objective of ending the flaring of associated gas.
Okunbor said many of the new Shell facilities are designed to eliminate continuous flaring of associated gas. “In parallel, a multi-year programme has been successfully implemented to install equipment for capturing associated gas from older facilities”.
As a result, flaring volume from the company’s facilities was reduced by 90% between 2002 and 2016 and flaring intensity decreased by 78% over the same period. Divestments also resulted in a further reduction.
There are several SPDC JV facilities where flaring still takes place. Some only have non-routine operational flaring. These include Soku, Bonny, Gbaran and Agbada, because they have fully functional solutions to address routine flaring. Others have routine flaring and the SPDC JV has identified solutions by capturing the associated gas and commercialising it for the domestic market.
The Bonny Associated Gas Solutions (AGS) facility was commissioned in 2016, while Adibawa and Otumara/ Saghara AGS projects came on stream in November and December of 2017 respectively.
Undoubtedly, the volume of gas flaring is substantial and the wasted resourse is capable of powering hundreds of thousands of Nigerian homes, as well as industrial areas with electricity access yearly. Apart from these alternative socio-economic resourcefulness of otherwise flared gas, flaring has been proven to have serious consequences on environmental health and social impacts in local communities in the Niger Delta and beyond.
These include respiratory illnesses, acid rain and corrosion of roofs, among others. The alternative social-economic uses available for flared gas, alongside the need to curb negative environmental, social and economic impacts of gas flaring; have made a national strategy for gas flare commercialisation highly necessary.
Preliminary groundwork prior to launching the programme included diverse case studies and economic analysis of various flare gas utilisation options for the country. Major highlights from the economic analysis include:
Harnessing gas from the top 50 flare points would reduce volume of flared gas by 80%, given 2015 gas flare locations and volumes as the baseline. Over 178 flare points collectively flare about 1 billion scf of gas.
Majority of the gas flare location about 65 per cent are onshore while at least 80 per cent of the gas flare locations can be viably utilised
Analysis of the gas flaring also shows that with investments pumped in to implement the NGFCP, huge social and economic benefits would accrue to host communities in gas-rich regions in the Niger Delta, investors and the national economy as a whole. Benefits would include curbing pollution in local communities and providing households with clean energy, particularly LPG (cooking gas), small and medium scale businesses, employment and jobs creation, alleviating social unrest, increased Mega Watts (MW) of electric power generation potential through gas-to-power, amongst others.
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