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World Bank, EBRD Join Forces to Cut Emissions from Gas Flaring in Russia and Central Asia

Press Release No:2012/145/SDN

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Both banks will manage a joint market study to explore efficiency improvements for oil and gas operations in four countries

 

WASHINGTON, November 8, 2011 — The European Bank for Reconstruction and Development (EBRD) is joining forces with the World Bank-led Global Gas Flaring Reduction partnership (GGFR) to help governments in Azerbaijan, Kazakhstan, Russia and Turkmenistan introduce energy efficiency measures to improve business competitiveness and environmental standards in oil and gas operations.

 

In collaboration with various oil and gas companies, the EBRD and the World Bank’s GGFR partnership will manage a ground-breaking market study designed to assess gas venting and flaring operations on about 100 oil sites spread across the four countries and identify the main obstacles that hinder the further utilization of associated gas. In addition, the study will analyze current legal and regulatory frameworks and look into market, infrastructure and financing barriers. 

 

Azerbaijan, Kazakhstan, Russia and Turkmenistan are among the world’s major flaring countries. Global gas flaring, estimated last year at 134 billion cubic meters (bcm), is not only a significant waste of a useful energy resource, but it also accounts for some 360 million tons of greenhouse gas emissions globally. According to latest satellite data, over 40 bcm of this associated gas – or about 30 per cent of global flaring – were flared in Europe and Central Asia in 2010, which amounts to some  100 million tons of carbon dioxide emissions – roughly equivalent to the annual emissions of some 20 million cars.

 

Through this joint initiative, both development banks will help oil-producing countries and companies reduce the waste of a valuable energy source and harm to the environment by making better use of significant quantities of associated petroleum gas, a by-product in oil extraction, which to a large extent is currently flared or vented into the air.  With this undertaking, the EBRD also officially joins the GGFR partnership, a public-private initiative of some 30 major oil-producing countries and companies that aim to overcome the challenges for the utilization of associated gas.

 

 “Gas flaring reductions in Russia and Central Asia are critical for improving energy efficiency and tackling greenhouse gas emissions,” says S. Vijay Iyer, Director of the World Bank’s Sustainable Energy Department.  “We welcome this joint initiative and look forward to partnering with EBRD on achieving more tangible results in the economic utilization of associated gas. We also welcome the participation of other development banks in these globally important efforts.”

 

As part of the new study, international and local experts will categorize oilfields in each country based on their location, type and size. They will also identify gas-oil production and own energy consumption volumes along with associated gas characteristics and its chemical composition.

 

According to Terry McCallion, EBRD’s Director for Energy Efficiency and Climate Change, the study will come up with a number of alternative options for associated gas utilization.

 

“We will aim to develop resource and energy efficiency improvements and cleaner production measures to minimize gas flaring in the participating countries. These improvements will later be supported as investment projects, ranging from using associated petroleum gas in power and heat generation on site to supplying it to gas treatment facilities where this gas could be turned into a liquid fuel for further use in other industries,” he adds.

 

The study, with a total estimated cost of €1 million funded by the EBRD’s Shareholder Special Fund, will be carried out by a consortium led by the Norwegian consultancy “Carbon Limits” with the participation of local expert companies.  The study results will be made public next year at a number of workshops and presentations, which will include the participation of oil companies, foreign and local manufacturers of the necessary equipment, government officials, regulators and other relevant organizations.

 

For the EBRD, the study’s specific energy efficiency focus builds on the achievements gained under its Sustainable Energy Initiative (SEI), a program that promotes improvements to reduce waste and harmful greenhouse gas emissions in the transition countries of the EBRD region – one of the most energy intensive and energy wasteful in the world. Since its launch in 2006, SEI financing reached €7.3 billion through nearly 400 projects across 29 countries.

 

The new joint study is the latest effort in the EBRD and GGFR’s collective commitment to overcome the barriers in reducing gas flaring by sharing global best practices and implementing country specific programs.

 

The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. www.ebrd.com

 

The World Bank-led Global Gas Flaring Reduction Partnership (GGFR) is a public-private partnership which brings together representatives of governments of oil-producing countries, state-owned companies and major international oil companies so that they can overcome the challenges that inhibit more utilization of associated gas across the world.

www.worldbank.org/ggfr

 

 

Contacts:

In London: Sergiy Grytsenko, +44 207 338 7329, grytsens@ebrd.com 

In Washington: Mauricio O. Ríos, +202 458-2458, mrios@worldbank.org 

 

 


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