By Michael Eboh

Nigeria lost $535.07 million, about N163.33 billion to gas flaring in nine months, as the Nigerian National Petroleum Corporation, NNPC, international and indigenous oil companies flared 176.59 billion Standard Cubic Feet (SCF) of gas between January and September 2016.

This was according to the NNPC’s Monthly Financial and Operations Report for the Month of September 2016.

Using the NNPC’s current gas price of $3.03 per 1,000 SCF of gas and the Central Bank of Nigeria’s, CBN, current exchange rate of N305.25 to the dollar, 176.59 billion SCF of gas flared translates to a loss of N163.33 billion ($535.07 million) to the country.

The report pointed out that the amount of gas flared in the nine-month period represented 77 per cent of total domestic gas; 20.9 per cent of total export gas and 20.7 per cent of total export gas.

Specifically, the report added a total of 1.927 trillion SCF of gas was produced in Nigeria in the nine-month period, with 227.95 billion SCF utilized for domestic gas; 845.28 billion SCF was exported; 176.59 billion SCF was flared, while total non-commercialised gas was 853.48 billion SCF.

*Gas flare

Further analysis of the report showed that in the nine-month period, 141.26 billion SCF of gas was utilised for gas to power; 86.69 billion SCF was utilized for domestic gas to industry, while 3.44 billion was sent to the West African Gas Pipeline.

In addition, 40.05 billion SCF, 79.33 billion SCF and 722.47 billion SCF were utilized by the Escravos Gas to Liquid, EGTL, project, Natural Gas Liquid/Liquefied Petroleum Gas (NGL/LPG) and the Nigerian Liquefied Natural Gas, NLNG.

Again, the report stated that the NNPC earned $616.01 million from the export of gas in the nine-month period, while N17.62 billion was earned by the NNPC from the domestic sales of gas in the period under review.

As a result of the huge quantity of gas flared on a daily basis in the country, the Ministry of Petroleum Resources, in its draft National Oil Policy, is proposing the elimination of automatic renewal of oil and gas licences and leases, basing the renewal on certain conditions among which are significant reductions in gas flaring.

The draft document said, “Similarly, licence renewals or extensions will now be based on licence holders making progress in meeting their exploration or production targets. Licence holders who do not meet licence conditions, including oil production, gas flare down, gas supply obligations, will risk losing the licence.”

The document also stated that over the medium to long term, gas will be diverted from its reliance on the power sector and will be increasingly used for gas based industrial purposes in Nigeria.

On the other hand, the Draft National Gas Policy stated that 379 billion SCF of gas was flared in 2014, while 331 billion SCF of the commodity was flared in 2015.

According to the document, one of the strategic objectives of the gas policy is the reduction of gas flaring, while others include identifying new gas resources from the Niger Delta, offshore and inland basins.

To this end, the document said, “To ensure that flared gas is utilised in markets, the government will take measures to ensure that flare capture and utilisation projects are developed and will work collaboratively with industry, development partners, providers of flare-capture technologies and third-party investors to this end, without prejudice to the enforcement of applicable sanctions.”