Nigeria’s Gas Production Surges by 12% in July, Reaching 175 Billion Cubic Feet Amid Mixed Utilization and Flaring Trends
In a significant development for Nigeria’s energy sector, the country’s total gas output saw a notable increase of 11.5% in July 2024, reaching 175.003 billion standard cubic feet (BSCF). This marks a rise from the 156.952 BSCF recorded in June 2024, as reported by the Nigerian National Petroleum Corporation Limited (NNPCL). The surge in gas production is a reflection of ongoing efforts to maximize the nation’s hydrocarbon resources amidst fluctuating global energy demands and domestic challenges.
The NNPCL’s latest report on the production and utilization of gas in Nigeria provided detailed insights into the sources and distribution of this output. According to the report, 63.5% of the total gas produced in July, equivalent to 111.153 BSCF, was derived from associated gas (AG). This type of gas is typically produced as a byproduct of oil extraction processes. The remaining 36.5%, or 63.851 BSCF, was sourced from non-associated gas (NAG), which is extracted independently of oil.
One of the key highlights of the report was the utilization rate of the gas produced in July. The NNPCL noted that 94.5% of the total gas output, amounting to 165.217 BSCF, was effectively utilized. This represents a 12% increase in gas utilization compared to the 147.634 BSCF reported in June 2024. The data underscores a positive trend in the country’s ability to harness its gas resources for various productive uses, contributing to both domestic energy needs and export markets.
Breaking down the utilization figures, the NNPCL revealed that 10.138 BSCF of gas was allocated for fuel gas, which is used in power generation and other industrial applications. The Nigerian Liquefied Natural Gas (NLNG) company, a major player in the global LNG market, utilized 69.427 BSCF, highlighting its central role in converting Nigeria’s natural gas into a liquefied form for export. Additionally, the Escravos Gas-to-Liquid (EGTL) project, another significant initiative, consumed 6.78 BSCF of gas in July.
Further contributing to the utilization statistics, the report stated that 2.273 BSCF of gas was directed towards the production of Natural Gas Liquids (NGL) and Liquefied Petroleum Gas (LPG), both of which are critical components in the production of cooking gas and other energy products. Moreover, 24.162 BSCF was sold in the domestic market through the Nigerian Gas Company (NGC) and other channels, providing a vital energy source for local industries and households. Another 52.436 BSCF was used for gas re-injection and gas lift make-up, processes essential for maintaining pressure in oil reservoirs and enhancing oil recovery.
However, the report also highlighted a persistent challenge in the form of gas flaring, a practice that involves burning off excess gas that cannot be processed or utilized. In July, Nigeria flared 9.565 BSCF of gas, representing 5% of the country’s total gas output. This figure marks a 3.26% increase from the 9.263 BSCF flared in June 2024, raising concerns about the environmental and economic impacts of this practice.
The NNPCL’s report provided a company-by-company breakdown of gas production, revealing that Shell Nigeria, operating within the Joint Venture (JV) segment, recorded the highest output with 42.9 BSCF of gas in July. Following Shell, Mobil Nigeria produced 24.325 BSCF, Chevron Nigeria 23.528 BSCF, and TotalEnergies Nigeria 21.006 BSCF. These companies, which are key players in Nigeria’s oil and gas sector, continue to drive significant contributions to the nation’s hydrocarbon output.
However, the report also called attention to the companies that were the worst offenders in terms of gas flaring. Notably, the NNPC Exploration and Production Limited (NEPL) and Seplat Petroleum Development Company (SPDC) Joint Venture, along with the NEPL-Chevron Nigeria (NEPL-CNL) Joint Venture, flared 100% of their total gas output in July. This is a stark reminder of the challenges that some operators face in managing associated gas, despite ongoing efforts to reduce flaring in line with global environmental standards.
In addition to these major operators, the report highlighted that NEPL flared 97% of its total gas output from Oil Mining Leases (OML) 86 and 88. Enageed Petroleum, another player in the sector, flared 95.83% of its total gas output, while Antan Producing Limited flared 65.7%. These figures underscore the need for increased investment in gas processing and utilization infrastructure, as well as stricter enforcement of anti-flaring regulations.
The rise in Nigeria’s gas production in July 2024 is a positive development, reflecting the country’s potential to leverage its vast natural gas resources for economic growth and energy security. However, the ongoing challenges related to gas flaring highlight the need for continued efforts to improve gas utilization and minimize environmental impacts. As Nigeria continues to navigate the complexities of its energy sector, the focus will be on maximizing the benefits of its gas resources while addressing the issues that hinder sustainable development.
In conclusion, while the increase in gas output and utilization in July represents progress for Nigeria’s energy sector, the persistent issue of gas flaring remains a significant hurdle. The NNPCL’s report serves as both a testament to the strides being made in harnessing Nigeria’s gas potential and a reminder of the challenges that still need to be addressed. As the country moves forward, the balance between production, utilization, and environmental stewardship will be crucial in shaping the future of Nigeria’s energy landscape.
