The gas flaring challenge 

The Federal Government has demonstrated a new determination to commercialise the abundant gas in the country that is being currently flared by European Oil and Gas firms drilling oil in the Niger Delta. It finally fined them the sum of $294m, which is about N127bn, for gas flaring. 

Statistics recently released by the National Oil Spill Detection and Response Agency (NOSDRA), said the fine was for gas flared between January and August, 2022.  
 
Due to the incessant flaring of gas in Nigeria, President Muhammadu Buhari in his capacity as the Minister of Petroleum Resources issued the Flare Gas (Prevention of Waste and Pollution) Regulations 2018, which provides a legal framework for the protection of the environment against the effect of gas flaring, prevent waste of gas and the creation of social and economic benefits to Nigeria from stoppage of gas flares. 

The government subsequently declared its commitment to eliminate gas flaring in the country by 2025 as it launched a National Gas Expansion Programme and affirmed the period 2021 to 2030 as the “Decade of Gas”.  A period within which the nation must shift focus from oil-centred exploitation to gas-driven industrial development.  

Yet the five European oil companies operating in Nigeria in joint ventures with the state oil company continue to drag their feet on the issue of gas flaring demonstrating that the gasification of Nigerian states is not in the interest of the European Union (EU). All they want to is to take our gas under conditions favourable only to Europeans.  They flare gas onshore and offshore Nigerian oil fields reportedly of about 2.5 billion cubic feet (bcf) per day because, as they claim, there is not enough infrastructure to make use of it. 

The companies reportedly say the government has never produced its fair share of the funding need to provide gas gathering infrastructure that would allow them to put out the flares. They blackmail Nigeria with economic consequences if its oil fields that flare gas are closed as it will slash the country’s oil output and income.    

Now that the European Union (EU) can no longer count on gas coming from the Russian Federation, it wants to build a new partnership with Nigeria to obtain more gas and LNG from the country. 
 
In going for this new partnership, Nigeria must insist that its LNG supply to EU nations should be based on long-term contracts without strings attached, like democratisation or lesbian, gay, bisexual, transgender and intersexual (LGBTI) rights. 

Qatar, one of the world’s top LNG exporters is reportedly planning to demand that EU nations sign long-term contracts that will lock EU countries in for two decades of LNG purchases. But the EU nations are reportedly saying that they need a shorter duration to reach the region’s pollution reduction goals. Qatar is being emboldened by a recent 20-year LNG deal a German energy company signed with a U.S. exporter, Venture Global LNG.

Germany, leading other European nations have been kicking against the strict nature of these LNG contracts with Qatar which will make them to keep importing fossil fuel even after they aim to curb emissions. If Qatar doesn’t relent, it threatens Europe’s ability to diversify supplies from Russia as the Persian Gulf nation may move to sign pacts in other regions like Africa.

In fact, Africa’s gas resources have gained a newly found prominence, pertinently by the European Union, in the wake of the ongoing Russia-Ukraine war and sanctions. The continent finally has a chance to play a central role in the global energy market.

Gas-producing African countries can rise to the challenge of being a major player in the energy market by formulating a unified approach to conclude LNG contracts with the European Union. 

Nigeria, as the continent’s major oil producer has been trying to harness gas belching from its oil fields so it can be exported or used to generate power. The fine of gas-flaring firms in the country demonstrate government’s determination to be on course with Algeria and Egypt to account for about 80 percent of Africa’s natural gas production from 2022 to 2025, according to the latest African Energy Chambers (AEC) Q2 2022 Outlook.

It said, “Nigeria and Algeria are expected to contribute to over 65 percent of the LNG exports from Africa to international markets.” Nigeria cannot meet that expectation with oil firms flaring gas in its oil fields. 

Alfa writes from Ilorin