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Natural Gas and Global Gas Flaring Reduction

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Gas Flaring
-- Related Links --
Global Gas Flaring Website
 

 

CONTEXT

 

·         Natural gas can contribute to reducing energy poverty and helping countries move towards a more sustainable energy path. It is the fossil fuel with the lowest carbon intensity, at half the carbon footprint of coal at the point of combustion. It can be the least-cost source of flexible electricity supply for grid-based systems with fluctuating supply and demand.

 

·         Available natural gas resources have been expanded by new drilling technologies and discoveries, lowering prices and potentially expanding the role of natural gas as an interim fuel for a low-emission future. Its importance in the global energy mix will likely rise, driven by expanding natural gas resources; the flexibility and competitiveness of gas-fired power plants to meet peak demand and complement intermittent renewable power generation; its lower emissions compared to other fossil fuels; and the need to diversify fuel supply options.

 

·         Approximately 140 billion cubic meters (bcm) of natural gas is flared each year, about 30 percent of the European Union’s annual gas consumption. During oil production, the associated natural gas is flared when barriers to the development of gas markets and gas infrastructure prevent it from being used. Gas flaring wastes a valuable and comparatively low-carbon energy resource and results in emissions of about 350 million tons of CO2 a year.

 

STRATEGY

 

·         The World Bank Group provides technical and regulatory assistance and advice to countries seeking options on institutional and regulatory frameworks for natural gas, including pricing policy to commercialize their natural gas and to increase possibilities for private investment. It advises on gas master planning, domestic gas sector development, and liquefied natural gas (LNG) import and export strategy. The Bank Group also provides support for gas-fired power plants, along with partial risk guarantees to encourage power and gas sales, and helps improve efficiency of gas distribution systems.

 

·         The World Bank Group has a leadership role in gas flaring reduction through the Global Gas Flaring Reduction Partnership (GGFR), to which 30 partners, including the World Bank Group, contributed a total of $10 million for the years 2013-2015. It is a public-private initiative involving governments and oil companies that work to increase utilization of natural gas associated with oil production by disseminating best practices, help remove barriers to flaring reduction, and through country-specific interventions. GGFR partners are Algeria (Sonatrach), Alberta (Canada), Angola, Azerbaijan, Cameroon (SNH), France, Gabon, Indonesia, Iraq, Kazakhstan, Khanty-Mansiysk (Russia), Kuwait, Mexico (SENER), Nigeria, Norway, Qatar, the United States and Uzbekistan; BP, Chevron, ENI, ExxonMobil, Kuwait Oil Company, Pemex, Qatar Petroleum, Shell, SOCAR, Statoil, TOTAL, Uzbekneftegas; EU, the European Bank for Reconstruction and Development, and the World Bank Group.


RESULTS

 

·         In 2013, the Bank provided its first Partial Risk Guarantee (PRG) for $145 million to support Nigeria’s Gas Supply and Aggregation Agreement. Under the 10-year agreement, Chevron Nigeria Ltd will provide gas to Nigeria’s Egbin power plant, thereby assuring gas availability and reliability for power generation and assisting in economic growth. With over 75 percent of Nigeria’s power generation depending on natural gas, assuring the availability and reliability of gas supply is a critical step in realizing the goal of un-interrupted electricity supply to Nigerian consumers.

 

·         Technical assistance from the Bank Group is helping Kenya develop governance and accountability systems to manage its future oil and gas wealth. The Bank Group is working with the government to develop the country’s petroleum resources to support growth in public and private sectors, while proactively forestalling adverse macro-economic, social and environmental impacts. Revenues will be used to support growth in domestic businesses, increase employment, develop infrastructure and expand training/education opportunities.

 

·         The Bank Group’s technical assistance supports Mozambique’s effort to design a national gas development master plan to guide exploitation of its recently-discovered offshore natural gas reserves. The plan has been well-received by government officials as well as stakeholders.

 

·         Satellite data on global gas flaring, a joint effort between GGFR and the US National Oceanic and Atmospheric Administration (NOAA), shows that overall efforts to reduce gas flaring are paying off. Estimated flaring of associated gas has dropped worldwide by almost 20 percent from 172 billion cubic meters in 2005 to 140 bcm in 2011, equivalent to taking about 52 million cars off the road.

 

·         A new Angola LNG project undertaken by GGFR partner companies reduces gas flaring in Angola since 2013, although it struggles with reaching full capacity utilization.

 

·         In Kazakhstan, a joint venture of Chevron, ExxonMobil, Kazmunaigaz and LukArco — the first three members of GGFR— has eliminated gas flaring emissions in the giant Tengiz oil field by 94 percent.

 

·         GGFR partners have established a collaborative Global Standard for gas flaring reduction. This Standard provides a framework for governments, companies, and other stakeholders to consult, take collaborative action, expand project boundaries, and reduce barriers to associated gas utilization. Over 15 GGFR partners have formally endorsed the Global Standard and committed to no flaring in new projects, except where no feasible alternatives exist.

 

·         In Iraq, GGFR and the World Bank are providing comprehensive technical assistance to help build institutions and systems to manage the country’s extensive gas reserves in the most efficient manner, thereby reducing wasteful flaring.

 

·         The World Bank Group has challenged oil producers to reduce flaring by another 30 percent over the period 2012-2017, to which GGFR partners are making best efforts through expanded company programs and results-focused approaches.

 

 

For more information, visit: www.worldbank.org/ggfr

 

Media Contacts:

Zubin Bamji (202) 458-0431, zbamji@worldbank.org

Christopher Neal: (202) 473-2049, cneal1@worldbank.org

 

Updated March 2014

 




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