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. 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. 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
8. Problem identification
The 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. Problem identification
Difficult topography
Thousands of miles of pipelines
Thousands of scattered oil and gas
wells
11. Previous flaring reduction efforts
Legal 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. Previous flaring reduction efforts
In 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
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 Delta
Shell Petroleum Development Company (SPDC) was chosen as a
case 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. Research methods
About 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. 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. 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. Harnessing natural gas
West 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. 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. 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
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
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