International oil companies operating in Nigeria flared a total of 198.12 billion standard cubic feet (scf) of natural gas between January and November, 2020.
Pegged at $2.56 per 1,000 scf, the 198.12 billion scf flared natural gas translates to a staggering loss of an estimated $507.19m (or N192.22bn), to Nigeria, using the official exchange rate of N379/dollar.
In December, 2020 for instance, natural gas production stood at 213.34 billion scf, translating to an average daily production of 6.88 billion act and out of this, 14.17 billion act was wasted through gas flaring.
According to the Nigeria National Petroleum Corporation (NNPC),
“the daily average natural gas supply to power plants increased by 3.52 per cent to 816mmscfd, equivalent to power generation of 3,445 megawatts”.
The corporation said out of the 208.61 billion scf of gas supplied in December, a total of 146.72 billion scf was commercialised, consisting of 42.90 billion scf and 103.82 billion scf for the domestic and export market respectively, reports The Tide.
The NNPC said, for the month of December, 2020, a total supply of 1.38 billion scfd of gas was for the domestic market while 3.35 billion scfd of gas was channeled to the export market.
Again, according to NNPC, “This implies that 70.33 per cent of the average daily gas produced was commercialised while the balance of 29.67 per cent was re-injected, used as upstream fuel gas or flared”.
The rate chargeable for gas flaring for December dropped from 7.15 per cent (i.e. 538.59 mmscfd) to 6.80 per cent (i.e. 457.25 mmscfd).
According to the revised payment regime for gas flaring, oil firms producing 10,000 barrels of oil or more per day will pay $2 per 1,000 standard cubic feet of gas, compared to N10 per 1,000 scf in the past while firms producing less than 10,000 barrels of oil per day will pay a gas flare penalty of $0.5 per 1,000 scf.