Nigeria looses billions in gas flarings annually

Sep 13, 2001 02:00 AM

The continued flaring of natural gas by exploration and production companies in Nigeria has led to the loss of $ 2.5 bn annually, representing a national asset which could have been harnessed for the growth of the industrial base of the nation. This was disclosed in Abuja by the Presidential Adviser on Petroleum and Energy, Alhaji Rilwanu Lukman, in an address at the inauguration of the Senate Committee on Gas, by Senate President Anyim Pius Anyim.
According to Lukman, although Nigeria was ranked the 10th largest gas province in the world with an estimated gas reserve of 158 tcf, "due to lack of appropriate gas utilisation infrastructure, of about 1200 bn cf of gas currently produced, 62 % is flared, while only 22 % is utilised and 16 % re-injected." Alhaji Lukman who was represented by the Special Assistant to the President on Petroleum Resources, Mr. Funsho Kupolokun, however noted that the Federal Government still stood on its decision for complete elimination of gas flaring by 2008.

To stop gas flaring which he said " was both wasteful and damaging to the environment", Lukman said schemes have already been put in place for more utilisation of gas, either domestically or overseas via gas pipelines. Lukman noted that the country was abundantly blessed with enormous natural gas resources "such that it is even being referred to as a gas province", adding that "the government appreciates so far, genuine efforts by the private sector and joint venture partners towards the timely implementation of the key national objective of orderly and optimal development/utilisation of gas resources."
He therefore charged the Senate Committee on Gas to pool its resources together to ensure the achievement of government objectives for enhanced development and utilisation of the nation's natural gas potentials. However, in his address, the Chairman of the 13-member committee, Senator Adewari Pepple stated that mere fixing of date for the extinction of gas flares was not the only solution to flaring and urgedall major exploration and production companies to run against time to beat the 2008 deadline.

Senator Pepple noting that the House of Representatives has already passed a bill fixing the extinction date for the year 2004, said, "we intend to look into the passed bill and come out with a position." He further said when the bill was eventually passed into law and the controversy surrounding the terminal date was finally put to rest, if the exploration and production companies failed to utilize flared gas, the Government should be at liberty to deal on such gas.
Senator Pepple said the committee would also conduct a public hearing soon with a view to passing an encompassing bill on gas production, transmission and distribution. In addition, the committee according to Senator Pepple will consider the establishment of a sole authority to regulate activities in the gas industry.
Appreciating the huge investments made by the Federal Government in the sector, he said there will be a need to encourage private investors by setting up national infrastructure such as National Gas Grid to transmit gas to existing and emerging industrial centres and urban centres with large domestic consumers with the intention of running it as a commercial organisation.

He also indicated that legislation will be made to ensure that the price of Nigerian gas is made competitive at both local and international markets. "We are convinced that by the mere fact that we have so much gas does not mean that E & P companies should give away their gas at a non-commercial price. In the case of export-oriented gas plants, the gas supplied should be paid for in foreign currency" he said. He assured that the committee would address the current practice whereby contracts on gas utilisation projects are exclusively assessed and awarded overseas to 100 % expatriates companies.
Stating that this practice will no longer be accepted, he said Nigerians have invested a lot in this sector and thus deserve a better deal. The natural gas committee has as members former Senate president Chuba Okadigbo who initiated the formation of the committee, Senators David Mark, Melford Okilo, Mohammed Alkali, Mike Ajeigbo, Emmanuel Diffa, and M.Y. Anka amongst others.

Source: This Day/All Africa Global Media
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