Data from the Nigerian National Petroleum Corporation (NNPC) has shown that Nigeria lost about $1billion (N170billion) as oil companies operating in the country flared a big chunk of the gas produced from January to September 2014.
The report established that about 296 billion standard cubic feet (scf) of natural gas was flared in the nine-month period. With natural gas price now about $3.30 per 1,000 scf, 296 billion scf of gas amounts to about $1billion.
International oil companies and indigenous players burnt a total of 43.7 billion scf in January (19.17 per cent of total production), 50.1 billion scf in February (23.20 per cent of production) and 38.3 billion scf in March (17.77 per cent of output).
In April, 22.3 billion scf of gas was flared; 19.7 billion scf in May and 23 billion scf was wasted in June. In July, 29.1 billion scf was flared; 39.1 billion scf in August; and 29.5 billion in September, the NNPC data showed.
Nigeria is Africa’s top oil producer and largest holder of natural gas reserves on the continent, with about 187 trillion cubic feet (tcf) of proven gas reserves and 600 tcf of unproven gas reserves.
However, low investment in gas infrastructure over the years has continued to hamper the development of the huge natural gas reserves in the country for domestic consumption, particularly for power generation.
The International Energy Agency (IEA), in its special report entitled: Africa Energy Outlook, said a critical uncertainty for Nigeria’s gas supply outlook was its ability to stimulate significant production of non-associated gas.
“Huge resources exist, sufficient to cover both domestic demand and exports. Production of non-associated gas increases in our projection period, but it is gradual. Exploiting this resource requires a change in focus by the upstream sector and, importantly, the government to establish a framework to incentivize the necessary large-scale capital investment,” the report stated.
This will require a stable, attractive investment environment generally and the development of a bankable commercial structure in Nigeria’s gas sector, which includes price reforms, improvements in regulatory arrangements, a redefinition of the role of public companies in the gas sector and an alternative to the current NNPC joint venture financing model, the IEA said.

Folashade Olubayo
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