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World Bank and EBRD call to cut global gas flaring by 30% in 2017

World Bank and European Bank for Reconstruction & Development to provide funding to reduce flared gas

The World Bank and the European Bank for Reconstruction and Development (EBRD) are calling the oil companies and the producing countries to cut the gas flaring by 30% in the next five years.

According to 2011 estimations, about 140 billion cubic meter (bcm) of natural gas was flared along the year.

This natural gas is flared as associated to the more valuable crude oil or condensate production.

Although this associated gas may have a market value, it may be flared for multiple reasons:

 – Quantities may be too short to justify collection and treatment

 – Located in too remote area for which transportation by pipeline would be unrealistic

 – Historical as it is was a common practice in the past

 – Offshore platforms or FPSOs have not left any space and weight available for gas treatment and export

Whatever are the reasons, the return on capital employed to monetize the flared gas may be in many cases less attractive for the companies and the producing countries than in liquids production (oil or condensate).

The World Bank estimated that about $50 billion worth of associated gas are flared every year at actual market gas prices.

For these reasons, the World Bank and the European Bank for Reconstruction and Development are mobilizing funds to finance this target to reduce the flared gas by 30% in 2017.

Initiated in 2002 with the establishment of the so called Global Gas Flaring Reduction (GGFR) partnership this World Bank program gave already significant results in reducing the gas flaring by 20% from 172 bcm in 2005 to 140 bcm in 2011.

Thus, this saving cut the emission of 274 tonnes of CO2, equivalent to removing 52 million cars from the road.

Kuwait targets less than 1% of flared gas

Among the best achievements of the GGFR partnership we find:

 – SOCAR and BP in Azerbaijan which halved gas flaring in just two years

 – Qatar Petroleum and Maersk captured 180 million cf/d of gas from Al-Shaheen project to feed electrical power plant

 – Pemex in Mexico reduced the flared gas by 66% in two years and align with new local regulation

 – Eni in Republic of Congo developped a 350MW power generation plant with the collection of the flared gas from M’Bundi oil field

 – Kuwait oil Company is now targeting less than 1% of flared associated gas

 – Nigerian National Oil Company (NNPC) managed to save 4 bcm of flared gas between 2006 and 2011.

Within the GGFR partnership the World bank provides support for:

 – Project funding

 – Partial risks guarantees to investors on Gas-to-Power projects

 – Technology deployment

 – Sharing best practices

 – Regulation

 – Identifying natural gas monetization projects

From these first ten years experience, the World Bank and the European Bank for Reconstruction and Development are taking new steps to reduce the flared gas by a new 30% in:

 – Capturing flared gas along the whole gas value chain upstream and downstream

 – Focusing on high potential savings countries such as Russia, Kazakhstan, Azerbaijan, Turkmenistan

 – Developing local infrastructures and gas markets

 – Promoting clean electricity power generation and cooking fuels

HVDC Power-to-Shore to monetize offshore flared gas

Most of these initiatives are related to onshore oil fields where conventional infrastructures may be installed for the associated gas capture, treatment, transportation and monetization.

But applications exist as well for offshore oil fields with the Power-to-Shore solution, including:

 – Offshore power platform or floating unit tied-in the oil producing platform or FPSO to capture, treat and convert the associated gas into electrical power

 – HVAC or HVDC electrical link from the offshore power platform to the local grid onshore.

The AC link will offer competitive connection for field located less than 150 kilometers from the shore.

The HVDC link will provide the perfect link at no losses on longer distance and higher power.

This technology is simple, well proven and competitive for small or medium size fields compared with alternative solutions such as Floating LNG or GTLmore suitable for large non-associated gas fields.

This World Bank program supported by the European Bank for the Reconstruction and Development for the reduction of the flared gas is part of the United Nation’s initiative about the “Sustainable Energy for All” which sees the access to the energy as the key for economical and social development.

In that respect, Iraq has engaged one of the largest Iraq with the South Gas Project, led by Shell, Mitsubishi and the local South Gas Company to invest $17.2 billion capital expenditure to rebuild flared gas capture and pipeline infrastructures and to build series of pipeline infrastructures to supply electricy all around the Basra region in southern Iraq.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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