Nigeria has, in the first 152 days of this year, flared about 85.4 billion standard cubic feet of natural gas, translating to monetary loss of about $510 million (N209 billion), a figure, averaging the three per cent funding to host communities in the 2021 Petroleum Industry Act.
Coming amid pressure to stop funding of gas as the global price of the commodity hit $6 yesterday, the prevailing global pressure, particularly fuelled by developed countries to transit to cleaner fuel meant that Nigeria’s 206 trillion standard cubic feet of proven natural gas may remain in the ground.
If the move for the defunding of gas becomes a reality, the Federal Government may remain a loser as goals of the Nigerian Gas Flare Commercialisation Programme (NGFCP) are yet to be realised four years after.
Standing as one of the top 10 gas flaring countries in the world after failing series of promises to bring an end to a menace that threatens health and environment of oil producing region, Nigeria’s gas flare rate was 7.73 per cent in January, translating to 554.01mmscfd.
The Nigerian National Petroleum Corporation Limited, in February, reported that the country’s gas flare rate was 7.67 per cent, meaning 565.52mmscfd compared with an average gas flare rate of 7.12 per cent (i.e. 529.20mmscfd) in February 2020.
Gas flare rate was 9.50 per cent for the month of March, which stood at 671.13mmscfd compared to the average gas flare rate of 7.25 per cent i.e. 532.37mmscfd for the period of March 2020.
Gas flare rate was 9.74 per cent for April, translating to 670.19mmscfd compared with average gas flare rate of 7.42 per cent (i.e. 542.22mmscfd) for the period of April 2020.
In May, out of the 216.29bcf of gas produced, a total of 133.56bcf was commercialised, consisting of 44.02bcf and 89.54bcf for the domestic and export markets respectively. About 38 per cent, 83 billion cubic feet was flared or re-injected, NNPC Limited said in its monthly operation and financial report.
The flare totalled 85.4 billion standard cubic feet. Considering that one million British Thermal Units (BTU) sold for about $6 yesterday at the international market, the 85.4 billion standard cubic feet flared by Nigeria stands at about 85 million BTU, which translates to $510 million.
The five-month flare is therefore higher than $500 million projected as the three per cent average funding for the host community in the Petroleum Industry Act.
Last month, the future of natural gas jumped by about 17 per cent. It has doubled in the last six months. Yesterday, natural gas sold for $6.18 per million BTUs, dropping by 0.18 per cent as of mid-day. The last time the price was this high was 2014.