Click here for search results
Online Media Briefing Cntr
Embargoed news for accredited journalists only.
Login / Register

Increasing Associated Gas Utilization in Russia Requires Comprehensive Measures, GGFR Study Shows

Available in: русский
Press Release No:2008/032/SDN

Contact:

In Moscow:

Marina Vasilieva (7-495) 745-7000 ext. 2045

E-mail: Mvasilieva@worldbank.org

InWashington, DC:

Mauricio Rios  (202) 458-2458

mrios@worldbank.org

Michael A Jones (202) 473-2588

mjones2@worldbank.org

 

Washington, DC, July 23, 2008 — Comprehensive measures, including both effective flaring regulation and more transparent access for independent gas producers to Russia’s gas transportation system, will be required to unlock the value of Russia’s gas associated with oil production, according to a new study which shows that reducing the flaring of gas can be a “win-win” for all.

 

The study, entitled “Using Russia’s Associated Gas”, was conducted by PFC Energy on behalf of and with the contribution of the World Bank-led Global Gas Flaring Reduction partnership (GGFR). Russian authorities and the GGFR partnership have been in dialogue over the past year to identify the most effective ways for Russia to reduce gas flaring. GGFR commissioned the study as part of this on-going support.  

 

“This study shows that increasing associated gas utilization in Russia can translate into substantial economic and environmental benefits,” says Klaus Rohland, World Bank’s Country Director for Russia. “That the Russian Government has started to address the flaring issue is a significant step toward improving Russia’s overall energy efficiency.”

 

The GGFR partnership estimates that globally at least 150 billion cubic meters (bcm) of gas are flared every year, adding about 400 million tons of greenhouse gases in annual emissions. This is equivalent to almost all the potential yearly emission reductions from projects currently submitted under the Kyoto mechanisms. Most of the flaring occurs in some 20 countries around the world.

 

The new study estimates that Russian oil producers annually flare some 38 billion cubic meters (bcm) or 1.3 trillion cubic feet (tcf), or some 45 per cent of the country’s associated gas production. In addition, it is estimated that some 10 bcm is flared from gas condensate production.

 

The study estimates that it could be economically viable to utilize up to 80 per cent of the flared gas in Russia, generating several billion US dollars in annual value and eliminating up to 80 million tons of carbon dioxide emissions per year.

 

“Utilization requirements and flaring penalties alone will not significantly reduce flaring as long as the barriers inhibiting commercialization of the associated gas remain in place,” says  Anastasiya Rozhkova of  the GGFR partnership . “Gradually raising domestic gas prices to stimulate investment and ensuring transparent access to the transportation network are also important steps in the right direction.¨

 

What the study shows

 

PFC Energy analyzed and compared the economics of five options for increasing associated gas utilization in Russia, including:

 

  • Generation of electricity to provide power to the oil field
  • Generation of electricity for the regional market
  • Process into LPG (propane, butane), petrochemicals and dry gas
  • Process into diesel or methanol (Gas To Liquids)
  • Re-injection for Enhanced Oil Recovery

 

Further, the PFC analysis shows that:

 

  • The optimal use of associated gas varies with the size of the producing field.

 

  • For small fields, the most attractive option is through small-scale power production to meet the needs of the field itself (electric submersible pumps, etc.) and other local users.

 

  • For medium-sized fields, the most economic utilization option is through extraction of the LPG in gas processing plants, and sale of the LPG or petrochemicals and dry gas.

 

  • For large fields, the most attractive option is electric power generation through a large power plant selling power wholesale to the grid.

 

Gas Flaring Worldwide

 

The major flaring region in the world is Russia and the Caspian (about 60 bcm), followed by the Middle East and North Africa region (about 45 bcm). Sub-Saharan Africa (about 35 bcm) is the third flaring region, followed by Latin America with some 12 bcm of gas flared annually.

 

Some of the major flaring countries in the world include: Russia, Nigeria, Iran, Iraq, Angola, Venezuela, Qatar, Algeria, the United States, Kuwait, China, Indonesia, Kazakhstan, Equatorial Guinea, Libya, Brazil and Mexico.

 

GGFR is a public-private partnership of governments, state-owned companies and major international oil companies committed to reducing flaring and venting worldwide. The GGFR partnership facilitates and supports national efforts to use the associated gas that comes with oil production and thus reduce flaring, by tackling the lack of effective regulatory frameworks and the constraints on gas utilization, such as insufficient infrastructure and poor access to local and international energy markets.

 

-


Related News

Rethinking Eurasian Cities - World Bank recommends actions for sustainable development of cities in Eurasia
Russia and World Bank Bolster Cooperation on Improving Business Climate and Supporting Innovation
“What’s Next for Russia’s Economic Future and Global Role?” - Lecture by World Bank Group President Jim Yong Kim



Permanent URL for this page: http://go.worldbank.org/FBKJR31QO0