The flames light up the sky all day. The noise that comes from them is a continuous roar, like that of a jet set to take off. The villages around the flares are all very hot. And, wait for this: doctors have reported higher rates of cancer, children with asthma and there are suspicions the burning gas may be making residents infertile.
These are the lot of communities who live near Nigeria’s more than 1,000 onshore well heads and are daily blighted by gas plumes that rise from the ground, spreading toxic smoke and chemicals over their farms.
These toxic orange flares – a by-product of the 2m-barrel-a-day oil industry – spew the equivalent of the United Kingdom’s annual gas use every three months, The Nation learnt.
This development has earned the country a place as the second largest gas flaring nation, behind Russia.
Aniete Aniete, a fisherman in the Niger Delta, said: “Because of the flares, it is so hot, it is smoky. The air is thick and it is constantly daytime here. Our rivers are black and the [acid] rain eats our houses. Our bodies are covered in oil. You feel that if you live to old age here, it is a miracle.”
In Nigeria, burning off the associated gas (AG) has been illegal since 1984. The Federal Government has set up several deadlines to end the practice. Some reductions have actually been seen recently. Oil companies and the Federal Government blame each other for a lack of infrastructure needed to trap and pipe flared gas.
The oil majors, ExxonMobil, Shell and Chevron between them flared 23.5bn cubic feet of gas in January alone, according to the Nigerian National Petroleum Company (NNPC).
Alexandra Gillies of Cambridge University, who is researching Nigeria’s oil and gas industry, said the Ministry of Petroleum Resources could end flare if it got tough with the oil companies.
“The ministry could make the plan succeed, if they worked systematically and really got tough with the companies,” he said.
The Petroleum Industry Bill (PIB), which is being considered by the National Assembly, has a provision against flaring.
A section in the Bill reads: “Any licensee who flares or vents gas without the permission of the minister in (special) circumstances … shall be liable to pay a fine which shall not be less than the value of gas.”
Environmentalists believe tightening existing legislation will not stop the release of greenhouse gases that are choking the mangroves of the Niger Delta.
The chairman of the Southsouth Youth Leaders Forum, Amachree Odiedim, said: “Another law won’t change anything. All eyes always turn to multinationals but the flaring originates from government-owned companies too.”
Towards ending flare
Former Head of State Gen. Yakubu Gowon last Wednesday revealed that over 460 billion standard cubic feet of gas that, if processed and exported, would have fetched the country over $2 billion was flared.
With a gas reserve of 187 trillion cubic metres estimated to last 109 years and unproven reserve of about 600 trillion cubic metres expected to last about 300 years, the country has the 7th largest gas reserve.
Gen. Gowon, who spoke while on a visit to the NLNG Plant in Finima, Bonny Island, said the country is thus not gas-challenged but gas-infrastructure-challenged. “We have more than enough gas to meet our entire domestic and export market commitments several times over,” he said.
Odiedim said infrastructure to pipe the gas to facilities where it is needed must be put in place. “The government should tackle basic things, giving deadlines to clean all the hundreds of constant little spills and changing obsolete, 50-year-old facilities. Then we will know, OK, this isn’t business as usual,” he said.
For the former Head of State, a major way of ending gas flare is to allow LNG projects being undertaken, such as the NLNG Train Seven, Brass LNG and OK LNG to be completed on time.
He said: “The NLNG has successfully pioneered gas monetisation and is the most significant arrow-head in government’s quest to end gas flaring.”
He added that half of the production volume of the NLNG comes from gas that would have been flared.
Former Head of Interim National Government (ING) Chief Ernest Shonekan said the Federal Government must sanction the NLNG Train Seven.
This is because nothing much can be done without the consent of the government, which has 49 per cent of its $13 billion assets through the NNPC. The remaining 51 per cent is owned by Shell Gas BV, Total LNG Limited and Eni International.
The seventh train has the potential of increasing the plant’s capacity to 30 million metric tonnes.
The former head of ING said: “Nigeria no longer has the luxury of deferring major decisions or of picking and choosing developmental projects to do and in what order. The LNG market is tightening. Other nations are not staying idle…
“That Nigeria is still flaring gas is an unacceptable fact in today’s world, not only from a health and environmental perspective, but also for the basic fact that the perpetrators are burning cash. Again, as a former captain of industry and a statesman, I find it detestable that our country not only still leaves value on the table and walks away, year after year, but also continues to literally pour money into flames by flaring gas!”
State of the LNG projects
When the NLNG started, it was with only two trains, which had a capacity to produce about six metric tonnes of LNG per annum. In less than a decade, the Nigeria LNG project grew to a six-train operating plant producing 22 million tonnes of Liquefied Natural Gas per annum.
Five years ago, it signed sales and purchase agreement for its seventh train intended to raise production to about 30 million tonnes of LNG. But up till now, the seventh train is still a dream, a situation which has made other countries leave Nigeria behind. No thanks to the inability of the country to improve on its LNG production capacity.
The Nigeria LNG Limited, once the fastest growing facility in the world, has slipped from controlling 10 per cent of the market share to about 8 per cent. Qatar and Australia are now the leaders. Qatar has moved its output from 20 million metric tonnes to 80 million metric tonnes. Australia, from its previous 20 metric tonnes, now churns out 81 metric tonnes annually. NLNG is stuck at 22 million metric tonnes. Australia has 10 LNG projects, with 20 trains and $215 billion worth of final investment decision.
The United States (U.S.), formerly a major LNG export destination, plans to become a net LNG exporter by 2016, with 1.1 billion cubic feet per day, projected to rise to 2.2 billion cubic feet per day in 2019.
China, with an estimated gas reserve of 1,275 trillion cubic metres, is also planning big for the LNG market.
The Brass LNG, The Nation learnt, is about to take Final Investment Decision (FID) for 20 million metric tonnes. In the case of the OK LNG, sandwiched between Ondo and Ogun states, Nigerians may have to wait till 2014 to know what direction it is moving.
NLNG’s Managing Director Babs Omotowa believes the delay in the progress of LNG projects may dip Nigeria’s market share in the global liquefied natural gas supply by a marginal 5 percent in 2017.
Omotowa, while speaking at the 2012 edition of the Nigeria Oil and Gas (NOG-12) conference in Abuja, said output has stagnated at 22 million metric tonnes per annum.
He said: “Looking at the market share dip to 10 percent in 2008; which is now 8 percent and will be 5 percent by 2017. Accelerated progress on Train 7 and other LNG projects will help build a better Nigeria.”
Shonekan said efforts at developing the country’s gas reserves are grossly inadequate, given the fact that a country like Australia with less gas reserves now have an LNG output of 81 metric tonnes. He also believes the country has a capacity to undertake more than one LNG projects at once, which suggests he sees no sense in NNPC’s position that the seventh NLNG train has to wait for the Brass LNG.
What is in Train Seven, other LNG projects
Building the seventh train of the NLNG plant, say industry watchers, will bring in Foreign Direct Investment (FDI) estimated at over $8 billion, help reduce flared gas and improve the country’s revenue profile. The country will also reap an additional $2.2 billion annually in dividend.
Omotowa believes the delay in progressing the NLNG Train 7 project, the Brass LNG and OK LNG projects, has deprived Nigeria of raising its LNG production to 52 million metric tonnes per annum.
Construction of the three LNG projects will create jobs. NLNG estimates that no less than 10,000 hands will be needed for its seventh train. And when completed, more hands will also be needed to man the plants, thus helping to reduce the army of unemployed.
