Reducing Gas Flaring: A Business Opportunity?
published on 17 May 2017
In Nigeria, more than 350 billion cubic feet (SCF) of gas are burned through flaring each year. This waste of energy is also responsible for more than 15% of the country's greenhouse gas emissions. AFD is exploring how to recover this gas and how it can be sold on the domestic market.
When crude oil is extracted, natural gas escapes from the wells. Recovering this gas requires heavy investment by the oil companies. That is why they prefer to burn it with flare stacks. This is a very common practice in Nigeria and a major source of greenhouse gases. It has harmful effects on the people's health (pulmonary ailments) and the environment (air, water, and soil pollution).
Recovering waste gas in order to resell it would help the Nigerian economy. It would double electricity production, and improve access to energy for more than 6 million households.
RECOVERING AND SELLING THE GAS
Reduction of flaring is one of the most ambitious objectives set by Nigeria in its contributions to COP21 (INDCs). By 2030, this would help economize approximately 64 million tons (MT) of CO2 per year, compared to the current carbon footprint of 450 MT per year.
AFD is working with the Ministry of Petroleum Resources in implementing this initiative. An initial 6-month assessment mission produced an analysis report and financial leads for using the gas.
It also identified barriers that must be removed in order to develop the domestic gas market:
- deficiencies in the existing pipeline network, which is run-down, incomplete, and regularly subject to acts of sabotage;
- the weakness of the electricity sector, which is the main domestic outlet;
- the small-scale and remoteness of a large number of gas flaring sites, making commercial exploitation of gas difficult.
REDUCING CO2 EMISSIONS AND REVITALIZING THE ECONOMY
To take on these challenges, AFD is going to finance projects that use new technologies facilitating the commercialization of waste gas. The main technologies given priority are:
• CNG (compressed natural gas),
• mini-LNG (liquefied natural gas),
• GTL (gas to liquids).
These technologies encourage new uses of gas and improve energy efficiency in the industrial sector (electricity production) and domestic sector (use of cleaner fuels for cooking). They also reduce greenhouse gas emissions.
