Nigeria Imposes Penalty For Gas Flaring
The
Nigerian Government has taken a major step to encourage domestic
utilisation of gas resources with the imposition of a penalty of
$3.50 per thousand standard cubic feet (SCF) of flared gas on
defaulting companies.
The measure came barely a week after the Nigerian
Bar Association and the Niger Delta Development Commission (NDDC)
jointly advocated a review of oil and gas laws, and the land Use
Act as they affect ownership and participation on the industry.
Chukwueke, represented Nigeria's Minister of
State for Energy (Petroleum) Mr. Odein Ajumogobia.
He said the penalty follows implementation of a
shift in policy focus from gas exports to domestic utilisation.
According to him, the policy took effect from the April 1, this
year.
He said "It is only this strategy that can develop gas for us
at least for now. This way, producers are forced to look for
third parties to utilise their flared gas”.
He explained that when the on-going reform
process was fully implemented, the NNPC would automatically
become a commercially-driven operator devoid of the current
government financial involvement.
“New Gas Plan”
He also disclosed that the Federal Executive
Council had approved implementation of the Gas Master Plan. A
consortium led by Centricca/Hydro has begun studies for
construction of a national gas grid that would connect different
parts of the country, he said.
The director explained that Ajumogobia, had to
stay home in the aftermath of recent attacks on oil
installations in the Niger Delta and the end of a strike by
local workers in Exxon Mobil's operations in the country.
The weeklong strike, launched April 24, disrupted
800,000 barrels a day of Exxon Mobil's production.
“NLNG Halts New Investment”
In the meantime, there are indications that the
management of Nigeria Liquefied Natural Gas (NLNG) may halt the
construction of its seventh train while investors evaluate the
new gas policy announced last March.
The new policy requires gas producers to allot
part of their output to the domestic market, rather than
exporting it.
The Director of the Department of Petroleum
Resources (DPR), Mr. Tony Chukwueke, made the disclosure at the
weekend while speaking on "Investment opportunities in a
reformed Nigerian oil and gas Industry" at the just-concluded
Offshore Technology Conference (OTC) in Houston, Texas, United
States (U.S.).
Nigeria LNG officials said last week that the
engineering, procurement andconstruction work on Train 7 Plus
project, which was due to kick off mid-2008, might be delayed,
waiting for the new gas policy to be analysed.
The policy, which has yet to be made a law, has
raised concerns over the future of LNG projects in the country.
Nigeria holds Africa largest gas reserves and the
seventh largest in the world.
Nigeria has a reserve of 184 trillion standard
cubic feet of gas and of the two billion standard cubic feet of
gas flared yearly, operators have only been able to utilise 40
per cent.
NP/MICHAEL
