Associated gas is a by-product of oil production. In Nigeria, the domestic market has insufficient capacity to absorb such gas, and there are few opportunities for its safe re-injection into reservoirs. Consequently, the gas is flared, leading to carbon dioxide emissions into the atmosphere.
This is a major concern for the industry and new and creative ways have been developed to end routine flaring.
One solution is Liquefied Natural Gas (LNG). In September 1999, the Nigerian Liquefied Natural Gas plant (NLNG) delivered its first cargo as part of a comprehensive plan to gather and commercialise associated gas, and to end routine flaring by 2008. Shell Gas BV has a 25.6% interest in the plant and Shell companies also provide technical advice. To date, NLNG partners have committed to invest $21 billion in gas gathering and processing, and by 2005, the plant’s total production capacity will be 17 million tonnes of LNG per annum.
In 2006, 70% of this will be from associated gas and will avoid the release of millions of tones of CO 2 equivalents each year. This will make NLNG the third largest LNG plant in the world enabling Nigeria to sell more LNG to countries that would otherwise be dependent on coal or other higher carbon-intensive fuels for energy needs.