Once again, the deadline for gas flaring has for the third time been extended to December 2011. December 31, 2008 was the second deadline set by the government as restiveness in the Niger Delta takes a huge toll on efforts to curb the wasting of the natural resource. This is coming five months after the Department of Petroleum Resources had threatened to shut down any company that is still flaring gas after December 31, 2008.
This is the third time the Federal Government is shifting the deadline for gas flare down.
Chairman, House of Representatives committee on gas, Igo Aguma, who confirmed this in Houston said that the consideration of 2011 date by all stake holders is a follow up to the request of the Nigerian National Petroleum Corporation (NNPC). This, according to him, is to enable the corporations managing Joint Venture (JV) fields on behalf of the Federal Government to address factors militating against the attainment of zero flare by the operators. This includes multinational oil firms such as the Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited, Mobil Producing Nigeria Unlimited (MPN), Nigeria Agip Oil Company (NAOC) and Elf Petroleum Nigeria Limited (EPNL).
Aguma explained that infrastructure needed to transmit associated gas from the oil fields to the market centres instead of flaring is a major challenge which will require a minimum of two years to complete successfully.
“We are all aware that there is currently a gas utilisation programme ongoing to support the power industry. We also know the capacity of the industry to receive the gas that is being flared. So, projects need to go on before we can have a zero flare out date”.
The chairman who spoke with journalists during an inspection of exhibition stands of companies registered by the Petroleum Technology Association of Nigeria (PETAN) participating at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, United States Of America (USA) lamented that the flare-out date is also subject to the availability of fund for investment in the industry. And in this regard, he noted that the NNPC is a major stakeholder in each of the gas utilisation projects needed to achieve the flare-out deadline.
The acting director, DPR, Billy Agha, who was then the head of Gas Division had threatened to penalise oil firms, particularly multinationals, after the December 31, deadline regardless of what will be the effects on Nigeria’s crude oil production capacity.
“If NNPC that is trusted with the management of JV operations on behalf of the Federal Government has agreed that adequate time is needed to raise funds required to complete major infrastructure and gas utilisation projects, without pre-empting the final decision of the House of Representatives on the gas re-injection bill which we have just concluded the public hearing as the chairman of the Gas Committee, there is already a consensus about 2011 as the possible date feasible for ending gas flaring in Nigeria”, he noted.
However, Agha who was appointed acting director of DPR in February 2009, two months after the expiration of the December 31, 2008 deadline, denied knowledge about the choice of the 2011 date without disclosing the number of fields shut down and errant companies penalised for flaring gas since the beginning of this year.
Industry sources close to multinational oil firms said the 2011 date is also unrealistic as a result of delay suffered by projects designed by them for bringing an end to gas flaring.
According to them, no significant progress has been achieved until investors were pre-qualified recently by the NNPC as prospective investors to explore for gas in Nigeria.
“If there is commitment by the Federal Government in terms of providing adequate fund to finance its equity in these projects, we can then look at 2013 date as the possible date”, he assured.
“However, it will be a waste of resources to talk of deadline without finding an immediate solution to the activities of Niger Delta youths disrupting execution of gas projects by our contractors”.
In early 2008, senior officials of Chevron Corporation in a presentation made to the Federal Government had suggested 2013 as the possible date for ending gas flaring. The company listed vandalism and insecurity in the Niger Delta as the reason for making arrangement for the construction of an offshore gas pipeline to connect the existing Escravos Lagos Pipeline to the Olokola Liquefied Natural Gas (LNG), power stations in Lagos and the West African Gas Pipeline.
May62009