14.6.2 NATURAL GAS AND NIGERIA
Following the former USSR, Iran and Northwest Europe, Nigeria has some of the largest proven reserves of natural gas in the world at about 3 trillion cubic metres, some 2% of world reserves. As with oil, Nigerian natural gas is especially valued because of its low sulphur content.
No one seems to be really sure what is the total Nigerian natural gas production, but it seems to be in the order of 22-25 billion cubic metres a year. Around 18 billion cubic metres of this is associated gas, most of which is flared, although a small amount is re-injected into the sandstone sponge, and even less is sold to electricity generating stations and industrial users. About 3 billion cubic metres per year of non-associated gas is currently tapped for industrial uses.
14.6.3 PROCESSING NATURAL GAS IN NIGERIA
In summary, having spoken to a number of oil industry sources, ERA estimates that natural gas from the Niger Delta is processed at the following rates.
| TYPE OF GAS | ESTIMATED AMOUNT PER YEAR |
| Associated Gas Flared | 18 billion m³ |
| Associated Gas Re-injected | 2 billion m³ |
| Associated Gas Used | 1.5 billion m³ |
| Non-associated Gas Used | 1.5 billion m³ |
The waste through flaring is prodigious, annually equalling about 45% of the energy requirements of France, the world's fourth largest economy. The obvious solution to the waste would seem to be the development of markets for the desirable low-sulphur gas and/or re-injection into the sandstone sponge until such a market is developed.
The local market (for natural gas) is undeveloped and the marketing is still uncertain. Nigeria has very few pipelines to get gas to the users - a few factories and power stations around Lagos and Port Harcourt - and most consumers rely on cheap petrol, diesel and kerosene or erratic supplies of electricity.
The producer has to sell all its gas to the Nigerian Gas Company, part of the NNPC group, whose dispute with another state monopoly, the Nigerian Power Authority, has further worsened the outlook for the industrial gas market.
What drives (the gas projects)...is the need to reduce the huge waste of gas, enough to provide power for a small industrial country, which is flared at Nigeria's oil fields by the six big operators because they have no market for the gas and pay minimal penalties for flaring.
Paul Adams in the Financial Times: 13th September 1996
An array of technical, geographical and financial factors do not make for an easy solution. Nonetheless efforts are being made to commercially exploit the gas, which point to future scenarios: four examples are given below.
