Gas Flaring Reduction In The Niger Delta


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Gas Flaring Reduction In The Niger Delta

  1. 1. Gas Flaring Reduction in the Niger Delta: A CaseStudy of Shell Petroleum Development Company (SPDC) Cyril Iyasele | April 2011
  2. 2. Outline Introduction Problem Identification Literature Review Research Methods Conclusion and Recommendation References
  3. 3. Introduction
  4. 4. Introduction The Niger Delta is the hub of oil industry in Nigeria Crude oil in Niger Delta region contains great proportion of associated gas Huge volume of associated gas are usually released during production of crude oil
  5. 5. Introduction Statistics  40 billion bbl proven oil reserves  187 trillion ft3 natural gas  2.4 million bbl daily oil production  3.5 billion ft3/day natural gas production 70% of gas produced daily is flared Flaring is the technical term for the combustion of unwanted flammable gases
  6. 6. Introduction Shell Petroleum Development Company (SPDC) started production in the 1950s  Little demand for gas  No market for gas Gas flaring remained accepted industry practice as SPDC established major oil operation across the Niger Delta Flaring of associated gas has continued unabated, even till now
  7. 7. Problem Identification
  8. 8. Problem identificationThe key issues facing the effective reduction in gas flaring in the Niger Delta Legal issues regarding gas flaring regulatory framework Nigerian government’s commitment /capacity to create enabling environment Fiscal and contractual framework for associated gas Lack of infrastructure and huge upfront cost to develop it Access to transmission and markets Energy pricing
  9. 9. Problem identification Difficult topography Thousands of miles of pipelines Thousands of scattered oil and gas wells
  10. 10. Previous Flaring Reduction Efforts
  11. 11. Previous flaring reduction effortsLegal Intervention 1979 Associated Gas Re-Injection Act (AGRA)  Banned flaring of associated gas  Forfeiture of concessions declared as penalty 1984 Associated Gas Re-Injection Regulations  Continued Flaring of Gas 1985 amendment of the 1979 Associated Gas Re-Injection Act (AGRA)  Continued Flaring of Gas in certain oil fields  Payment of fine declared as penalty
  12. 12. Previous flaring reduction effortsIn the late ‘90s State oil company – Nigeria National Petroleum Corporation (NNPC) embarked on conception of gas utilizing projects Collaboration with major oil producing companies Since then, a number of projects have gone on stream
  13. 13. Research Methods
  14. 14. Research methods Objective of study was to examine the efforts of one of the major oil producing companies operating in the Niger Delta region, in reducing continuous gas flaring in the Niger DeltaShell Petroleum Development Company (SPDC) was chosen as acase study for the following reasons: SPDC accounts for key volume of Nigeria’s total oil and gas production SPDC has suffered substantial blame for the devastated environmental state of the Niger Delta
  15. 15. Research methodsAbout SPDC SPDC runs Nigeria’s largest oil and gas production JV on behalf of the state. NNPC (55%), Shell (30%), Total (10%) and Agip (5%) SPDC operates mainly onshore and in the shallow waters in the Niger Delta Operations spreads over 30,000 square kilometers A network of over 6,000 kilometers of flow lines and pipelines, 90 oil fields, 1000 producing wells, 72 flow stations, 10 gas plants and two major oil export terminals SPDC produces an average of over one million boe/d In 2009, the total production from Shell-run operations in the Niger Delta averaged 629,000 boe/d
  16. 16. Harnessing natural gas SPDC has been a pioneer in the development and application of the technology to harness natural gas in the Niger Delta region
  17. 17. Harnessing natural gas Nigeria Liquefied Natural Gas (NLNG)  SPDC’s interest holding in NLNG is 25.6%  SPDC is the major supplier of gas to NLNG plant  Plant takes in 3.5 bcf/d of feed gas  NLNG is the largest gas utilization project in Nigeria
  18. 18. Harnessing natural gasWest African Gas Pipeline (WAGP) SPDC’s holding interest is 17.8% 170 mmscfd volume of initial gas required SPDC JV expected to supply 70 mmscfd
  19. 19. Harnessing natural gas Gbaran-Ubie Integrated Oil and Gas Project  Built to harness associated gas from wells in some fields in Bayelsa State  Boost power generation in the Niger Delta region
  20. 20. Harnessing natural gas SPDC has several other gas utilization projects in the Niger Delta {non-associated gas (NAG) supply as feed stock} NAG mostly comes from various gas wells scattered around the Niger Delta region Some of these projects include: Afam Integrated Gas and Power Project • Okoloma Gas Plant • Bonny Terminal Integrated Project
  21. 21. Conclusion
  22. 22. Conclusion Efforts are being made by SPDC to reduce continuous gas flaring in the Niger Delta The Federal Government of Nigeria needs to:  build major gas utilization projects around associated gas  embark on constructing comprehensive gas infrastructure in the Niger Delta region  providing a stable fiscal framework, and also a firm attractive investment climate
  23. 23. References Ekpoh, I.J., and Obia, A.E., (2010). The role of gas flaring in the rapid corrosion of zinc roofs in the Niger Delta Region of Nigeria. Environmentalist 30, 347-352. Shell Nigeria, 2011. <>. LaPin., 2009. How dependency bedevils development in the Niger Delta. Development in the Niger Delta. Olaniyan, B.A., and WIlliams, D.E., (2008). Applying anticipatory and relational perspectives to the Nigerian delta region oil crises. Public Relations Review 34, 57-59. Sonibare, J.A., and Akeredolu, F.A., (2006). Natural gas domestic market development for total elimination of routine flares in Nigeria’s upstream petroleum operations. Energy Policy 34, 743-753. Labeyrie, H., Rocher, A., and TOTAL E&P., (2010). Reducing flaring and improving energy efficiency: an operator’s view, paper presented at the SPE International Conference on Health, Safety and Environment in Oil and Gas Exploration and Production, Rio de Janeiro, Brazil. Dung, E.J., et al., (2008). The effects of gas flaring on crops in the Niger Delta, Nigeria. GeoJournal 73, 297-305. Niger Delta of Nigeria. Voluntas 19, 189-210. Efe, S.I., (2010). Spatial variation in acid and some heavy metal composition of rainwater harvesting in the oil-producing region of Nigeria. Nat Hazards 55, 307-319.
  24. 24. References Odumosu, I.T., (2005). Reforming gas flaring laws in Nigeria: the transferability of the Alberta framework, LL.M. thesis, Faculty of Law, University of Calgary, Calgary, Alberta, Canada. Bello, O.B., (2009). Environmental legal implications of oil and gas exploration in the Niger Delta of Nigeria, S.J.D. dissertation, Washington College of Law, American University, Washington, United States. Obanijesu, E.O., and Macaulay, S.R.A., (2009). West African gas pipeline (WAGP) project: associated problems and possible remedies. Appropriate Technologies for Environmental Protection in the Developing World. Nitzov, B., (2004). Prospects for gas supply and demand and their implication with reference to transit countries and their policy-drawing upon recent experiences from European countries. Security of Natural Gas Supply through Transit Countries, 273-306. Orogun, P., (2010). Resource control, revenue allocation and petroleum politics in Nigeria: the Niger Delta question. GeoJournal 75, 459-507. Edino, M.O., et al., (2009). Perceptions and attitudes towards gas flaring in the Niger Delta, Nigeria. Environmentalist 30, 67-75. Brzustowski, T.A., (1976). Flaring in the energy industry. Prog. Energy Combust. Sci. 2, 129- 141. Rotty, R.M., (1973). First estimates of global flaring of natural gas. Atmospheric Environment 8, 681-686.
  25. 25. References Adewale, D., and Ogunrinde, J., (2010). An economic approach to gas flare-down in a selected field in Nigeria, paper presented at the 34th Annual SPE International Conference and Exhibition, Tinapa, Calabar, Nigeria. Ikediobi, M.C., (2010). Factors related to the violence and hardship in the Niger Delta, a region enriched with oil and natural resources, Ph.D. dissertation, University of Phoenix, United States. Higgins, K (2009). Regional inequality and the Niger Delta, Overseas Development Institute, London, UK. Akiyode, O.O., (2010). Gender mainstreaming of environmental concerns: panacea for environmental sustainability and peace in the Niger Delta region. Journal of Sustainable Development in Africa 12. Adami, G., et al., (2007). Metal pollution assessment of surface sediments along a new gas pipeline in the Niger Delta (Nigeria). Environ Monit Assess 125, 291-299. Edino, M.O., et al., (2009). Perceptions and attitudes towards gas flaring in the Niger Delta, Nigeria. Environmentalist 30, 67-75. Osuoka, A.I., (2007). Oil and gas revenues and development challenges for the Niger Delta and Nigeria, paper presented at the Expert Group Meeting on The Use of Non-Renewable Revenues for Sustainable Local Development, New York, United States.
  26. 26. References Uwafiokun, I., (2009). Oil extraction and poverty reduction in the Niger Delta: a critical examination of partnership initiatives. Journal of Business Ethics 90, 91-116. Odeyemi, O., and Ogunseitan, O.A., (1985). Petroleum industry and its pollution potential in Nigeria. Oil & Petrochemical Pollution 2, 223-229. Efe, S.I., (2010). Spatial variation in acid and some heavy metal composition of rainwater harvesting in the oil-producing region of Nigeria. Nat Hazards 55, 307-319. Nsikak, U.B., and Etesin, U. M., (2008). Metal contamination of surface water, sediment and Tympanotonus fuscatus var. radula of Iko River and environmental impact due to Utapete gas flare station, Nigeria. Environmentalist 28, 195-202. Otitoloju, A., and Dan-Patrick, J., (2010). Effects of gas flaring on blood parameters and respiratory system of laboratory mice, Mus musculus. Environmentalist 30, 340-346. Eweje, G., (2006). Environmental costs and responsibilities resulting from oil exploitation in developing countries: the case of the Niger Delta of Nigeria. Journal of Business Ethics 69, 27- 56. Anugwom, E.E., and Anugwom, K.N., (2009). The other side of civil society story: women, oil and the Niger Delta environmental struggle in Nigeria. GeoJournal 74, 333-346. Osaghae, E.E., (2008). Social movements and rights claims: the case of action groups in the