The federal government yesterday, disclosed that the country would need about $3.5 billion worth of inward investments to achieve the gas flare commercialisation targets by 2020.
The government said despite reported success stories of the Nigerian National Petroleum Corporation(NNPC) and its joint ventures (NNPC/JV) which said the country recorded over 70 per cent decline in flaring over the past decade, the situation was still alarming.
Program manager, Nigerian Gas Flare Commercialization Programme (NGFCP), Justice O. Derefaka, stated this on Thursday while speaking at the 2019 Oloiribiri Lecture Series and Energy Forum organised by the Society of Petroleum Engineers (SPE) in Abuja.
Presenting a paper titled: “Climate Change Impact and The Role of Harnessing Nigeria’s Flare Gas in the Energy Mix Transition for Economic Development – Prospects & Opportunities,” Derefaka said Nigeria still flare 1 billion cubic feet (BCF) of gas in 2017, exceeding the ~800 MMSCFD utilised for power generation and ~450 MMSCFD utilised in domestic industry.
Derefaka, who described gas flaring as a waste of a precious natural resources, noted that Nigeria with a population of over 180 million people, only 12.5 per cent of country’s population have access to power supply.
According to him, commercialisation of flared gas for supply into the domestic market was a high priority strategy for the government in achieving the national mandate for flare-out by 2020.
Speaking on how to overcome the challenges, he said, “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.Some of the measures according to him includes, opening an industry consultation mechanism as an important measure in ensuring flaring targets were feasible and regulations were realistic, Maximising the utilisation of associated gas to be treated for supply to power generation or industry, increasing the gas flaring penalty to an appropriate level sufficient to de-incentivise the practice of gas flaring whilst introducing other measures to encourage efficient gas utilisation.”
He further disclosed that the Flare Gas (Prevention of Waste and Pollution) Regulations 2018, has been approved by Mr. President and gazetted to underpin the implementation of the NGFCP (Approved 5th July 5, and gazette July 9, 2018).
In his presentation, the group managing director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maitanti Baru, emphasised the need for the country to intensify efforts to increases its petroleum products refining capacity, stressing that local demand for the products was expected to rise from 13.2 million metric tonnes in 2015 to 15.1 million metric tonnes in 2020 and 17.3 million metric tonnes by 2025.
Baru attributed the consumption increase on the country’s population growth and corresponding demand which he said stood at 182 million in 2015, 207 million in 2020 and 234 million in 2025 respectively. At an average population growth rate of 3 per cent per annum.
Delivering a presentation titled: ‘Moving Nigeria towards Energy Self-Sufficiency,’ Baru expressed hope that at the end of the lecture series, discussants and attendees would have a better appreciation of the issues and actions required so that collectively as an industry, every Nigerian can work towards actionable steps to emplace enduring and sustainable development for the oil and gas industry in Nigeria in particular.
He expressed concerns that despite abundant oil and gas reserves, Nigeria experiences shortages in electric power.
“Based on Nigeria’s energy consumption current and forecast, available statistics showed an increase from 6 GW in 2015 to 30 GW by 2025 with the primary source of the current power supply being from hydro and gas.
“The future consumption which is expected to drive growth by 2025, would need aggressive development of gas and renewables projects to meet the exponential demand,” he said.
On the nation’s refining capacity, the NNPC boss said, “Nigeria needs a refining capacity of 1.52 million Barrel Per Stream Day (BPSD) in order to meet its PMS requirement by 2025.
“This capacity requirement includes NNPC’s current nameplate capacity of 445,000 BPSD (WRPC, KRPC and PHRC) and Dangote Refinery’s 650,000 BPSD. This leaves a shortfall of 427,000 BPSD which is equivalent of 20 million liters of PMS per day.”