While routine gas flaring remains a challenge for oil and gas-producing countries like Nigeria, KINGSLEY JEREMIAH writes that there is a prospect in gas-gathering facilities in the race to meet 2060 zero flare target.

According to the World Bank, Nigeria had about 174 individual flare sites as of 2022. Late last year, the Nigerian Upstream Petroleum Regulatory Commission, through the Nigerian Gas Flare Commercialisation Programme (NGFCP), awarded 49 flaring gas sites for gas commercialisation. Although the award was lauded as a step in the right direction, it took the government about six years of dilly-dallying to move ahead with the NGFCP.

Gas flaring, the practice of burning off excess natural gas during oil extraction, releases significant amounts of carbon dioxide and other harmful pollutants into the atmosphere. This contributes to global warming and has severe health implications for nearby communities, including respiratory issues and other chronic conditions.  Additionally, flaring represents a considerable waste of valuable natural resources that could otherwise be harnessed for energy production.

Currently, Nigeria has 209 trillion Standard Cubic Feet of gas reserves, but gas-to-power, cooking, and transportation remain challenges. Nigeria is even seeking imports from smaller African countries amid skyrocketing prices that could have been reduced if the country took the gas sector seriously.

The Guardian reported that oil companies operating in Nigeria flared about $3.9 billion (approximately N3 trillion) worth of gas in the last four years, despite growing environmental concerns and revenue leakages in the nation’s petroleum industry.

Last week, the Nigerian Content Development and Monitoring Board (NCDMB) and the Oildata Group commissioned the 300 million standard cubic feet per day (mmscf/d) Kwale Gas Gathering (KGG) Facility and the upgraded Nedogas Processing Plant (NGPP) in Delta State. This indicates that ending gas flaring is possible if the government and stakeholders are committed and engage in the right partnerships and collaborations.

The Nedogas Plant and the Kwale Gas Gathering Facility, located at Ndokwa West LGA, Kwale in Delta State, address the challenge of stranded gas resources by providing infrastructure for gas gathering, compression, injection, and metering. This unlocks the potential of natural gas fields in the OML56 oil province and offers independent operators a viable and immediate pathway to market. The Nedogas Plant in Energia’s Ebendo field, just 3 kilometers away, boasts an initial gas injection capacity of 25 MMscfd.

This project is expected to add N357.2 billion to Nigeria’s gross domestic product over four years and create thousands of direct and indirect jobs. Replicating similar success stories across the over 100 flare sites in the Niger Delta will mitigate the long-standing environmental crisis in the oil region and boost the country’s energy footprint.

For most gas-related projects, funding remains a challenge amidst dwindling investment in fossil fuels. The Kwale gas gathering project was funded by the United States Trade Development Agency (USTDA), with primary funding from NCDMB and Xenergi, a subsidiary of Oildata. This innovative approach to funding is key for countries like Nigeria, which has seen a significant reduction in investment in recent years.

The Executive Secretary of NCDMB, Felix Omatsola Ogbe, noted that the NCDMB, as a business enabler with a mandate to support initiatives that foster national capacity development, would be more than willing to be a part of projects that are key to the developmental mandate under the Nigerian Oil and Gas Industry Content Development (NOGICD).

“A major objective of our investment in third-party companies is to support the Federal Government to achieve its job creation mandate, to create value with our natural resources, and contribute to achieving Nigeria’s flare-out targets. In these projects, we aim to create many direct and indirect jobs. Our other investments are also creating jobs and supporting the economy,” he said.

Ogbe revealed that a $1 million return on investment has been made from the gas project, demonstrating the availability of the right skill sets and human capital for executing projects in Nigeria. This underscores the board’s achievements in the thirteen years of implementing the NOGICD Act.

While Nigeria has tried to position itself as a gas country and has introduced several policies to promote gas, including the Decade of Gas and the Autogas Policy, most investors have not been as keen on gas compared to oil. Some stakeholders believe that good incentives are necessary to create the progress the country is looking for.

Managing Director of Energia Limited, Chidi Egonu, believes in tax holidays as a key fiscal incentive to unlock the gas industry. He suggested that a long-term approach, such as a 10-year tax holiday, would unlock the sector and provide necessary jobs and economic development.

On his part, the Chairman of Nedogas Development Company Limited (NDCL), Emeka Ene, stressed the need for overall development to ensure gas flare-out across the country’s flare sites. He emphasised that harnessing this opportunity could create benefits not only for the country but also for the oil region.

These moves could bring Nigeria closer to gas monetisation instead of flaring, promising cleaner energy and a healthier environment while creating hundreds of direct and indirect jobs and economic upliftment of host and nearby communities.

While addressing other regulatory and fiscal challenges, Nigeria must also deploy the Gas Infrastructure Fund already provided through the Petroleum Industry Act to ensure that the sector is developed.