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Nigeria: Country Loses $72bn to Gas Flaring
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This Day (Lagos)
27 June 2008
Posted to the web 27 June 2008
Patrick Ugeh
Abuja
Nigeria lost about $72 billion to gas flaring at an average of $2.5 billion per annum between 1970 and 2006.
This was disclosed yesterday by Nigerian Gas Association (NGA), at the NGA's 2nd quarter business forum in Abuja where the President of NGA, Engr. Chris Ogiemwonyi citing industry data, affirmed that Nigeria still flares and average of 1.2 trillion cubic feet of gas annually.
Ogiewonyi, who is the Group Executive Director, Exploration and Production of the Nigerian National Petroleum Corporation (NNPC), said: "When the wider effect of the environmental, economy and social consequences are factor into this estimation. We could potentially be discussing numbers in the region of $150 billion in real terms"
According to him, after 50 years of oil production Nigeria most of the country's producing fields are "characterised by routine flares with little visible efforts" to take out the flares in the near future.
"Operators have consistently feared the risk of oil shut-in when asked to implement gas flare down date of 31st December 2008", he said. "I have also heard the comparison that compliance to the deadline amounts to only a conservative $800 million in gas revenue in 2008. Further, it has also been said that the proposed tax of $3.5 per a million standard cubic feet of gas flared is punitive and counter-productive."
According to him, oil producing companies have claimed in 2008 alone that about 870,000 barrels of oil will be shut-in amounting to a revenue loss of about $12.08 billion.
"But we need to realize likewise that government has a responsibility to conserve for the futures generation and not allow a waste that cannot be justified against economic data available to us", Ogiemwonyi stated.
He said what Nigeria needs is capital project implementation towards gas flare down as demonstrated by Nigeria's Liquefied Natural Gas, Condensate recovery, gas gathering and gas re-injection project among others.
"We expect that operating companies will quickly aligned with government in realising the Nigerian gas master plan and vision the master plan as the catalyst to realising that potential of gas as a great enabler towards Nigeria's growth aspirations", he said.
The Minister of State for Energy (Gas), Mr. Emmanuel Odusina, stated that in the master plan, there is a proposal for three backbone gas transmission system for Nigeria. He added that the backbone would be operated independently, but would be interconnected to form a gas grid.
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"The South-North transmission system comprises of 1135 km of 45-inch pipeline system originating from Akwa-Ibom/Calabar Central Processing Facility (CFP), traversing Abia, Ebonyi, Enugu, Kano and Kaduna State via Ajaokuta and Abuja", he said.
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