DEVELOPMENT OF A SUSTAINABLE FRAMEWORK TO MANAGE FLARE GAS IN AN OIL AND GAS ENVIRONMENT: A CASE STUDY OF NIGERIA

Abstract

Associated natural gas is produced as a by-product from crude oil exploration and production. When perceived as a non-desirable product, it is wasted during gas flaring. Globally, about 100 Billion Cubic Meters (BCM) of gas is flared annually, leading to release of about 300 million tons of carbon dioxide yearly into the environment. Russia and Nigeria flare more than other countries to the tune of 35.5 and 18.27 BCM, respectively. The consequence of gas flaring has continued to pose significant threats to the environment as well as the economy of oil and gas producing countries. Therefore, this research is aimed at developing a sustainable framework that could enable management of flared gas in an oil and gas environment by generating energy and also minimise environmental impact that arises from gas flaring process. Three major research gaps were identified and they include lack of existing gas flare management framework in Nigeria, lack of economic evaluation of gas to wire (GTW) technology for flared gas reduction and, lack of cordial relationship and understanding between oil and gas producing/flaring companies and electricity producing sectors towards gas flare management. A qualitative research strategy was employed – utilising the single case study approach with embedded units of analysis. Three case study companies were used - one oil and gas producing company, and two electricity-generating companies. Data collection involved semi structured interviews, documentation, observation, and review of relevant literature. Data was analysed using QSR Nvivo version 10. A framework for flared gas reduction was developed based on literature review and also from information made available by experts operating in the oil and gas and electricity sectors. The framework shows inputs from various stakeholders, as well as an evaluation of volume of gas produced, utilized and flared. An economic assessment of GTW technology was carried out to determine the cost effectiveness of the framework. Findings from the study showed that GTW is a viable means of management, and could reduce the total volume of flared gas in Nigeria to 7.1%. This reduces environmental, health and safety hazards. It is also economically profitable. A total capital investment of £1.64b is required in the Nigerian context, with a net profit of £1.26b/year, and has a rate of return of investment of 16.3%. This study has demonstrated that GTW is a sustainable technology for reducing flared gas in Nigeria and other countries facing similar challenges as Nigeria; and capable of minimising adverse environmental and health impact associated with gas flaring. Therefore, the developed framework is also recommended for effective management of flared gas in such countries.