Key highlights
- The Gas for Africa report highlights the fact that Nigeria is ahead of some African countries in implementing a gas flare reduction policy
- As of January 2023, 139 companies had qualified for the NGFCP; Nigeria’s gas flare reduction initiative
- Nigeria does not allow routine gas flaring without prior approval
Nigeria first established the Nigerian Gas Flaring Commercialization Program (NGFCP) in June 2017. Since then, there has been some delays in implementing the policy. However, in January 2023, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced that 139 companies have been awarded qualified applicant status under the NGFCP.
In its Gas for Africa report, investment research agency Hawilti and the International Gas Union explained that Nigeria’s efforts to cut gas flaring date back to the development of the Nigeria LNG Bonny LNG export terminal in the 1990s.
The report further noted that most feedstock for LNG production come from associated gas that was previously flared, to such an extent that the commissioning and expansion of Nigeria’s LNG led to the monetization of about 218 billion cubic meters (bcm) of associated gas and decreased flaring in the country from 65% in 2001 to less than 20% today. The report states:
- “It is expected that this trend will continue toward elimination. Flaring reduction became national policy in 2015 when Nigeria included specific commitments to reduce flaring into its nationally determined contributions (NDCs)at the foundational COP21 Paris meeting, which produced the Paris Agreement.”
Gas flaring reduction in Nigeria
The report noted that Nigeria’s gas flaring regulations came into force 2018, specifying a penalty of $2 per 1,000 standard cubic feet of gas flared per day for companies producing 10,000 barrels of oil per day (bopd) or more, and $0.50 per 1,000 scfd for companies producing less than 10,000 bopd.
The commitment to reduce gas flaring was further strengthened with the adoption of the Petroleum Industry Act (PIA) in 2021, which lightened fiscal provisions around monetary sanctions. Gas flaring has continued to steadily decrease in Nigeria, reaching approximately 6.6 bcm in 2021 against 9.6 bcm in 2012.
Why Nigeria’s flare reduction plan is solid
The cited report highlights a comparison between policies targeted at gas flaring reduction initiatives in Algeria, Angola, Egypt, Gabon, Libya, and Nigeria. The results reveal that Nigeria has all the factors for having a sustainable gas flaring policy ahead of other highlighted countries. The factors include the following:
- Set flaring targets
- Legislation and regulation empowerment
- Prohibition of routine flaring or venting
- Development plans must include provisions for use of associated gas
- Associated gas projects require an economic evaluation
- Measuring and reporting standards are prescribed
- Monetary fines, penalties and sanctions imposed for violations
- Non-monetary sanctions are imposed for violations
- Fiscal incentives provided for reductions
- Market-based incentives provided for reductions
- Mid- and downstream regulations encourage reductions
What you should know
The report however notes that more needs to be done if the country wants to meet its NDC commitment to end flaring by 2030, as it plans to focus on addressing flaring across hundreds of small and disparate fields