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Nigeria Loses N94bn to Gas Flaring in Four Months

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Gas Plant
  • Nigeria Loses N94bn to Gas Flaring in Four Months

The country lost at least N94bn in four months as oil and gas companies flared a total of 87.03 billion standard cubic feet of natural gas in that period.

The latest monthly report from the Nigerian National Petroleum Corporation showed that 22.60 billion scf of gas was flared in October; 21.50 billion scf in September; 21.14 billion scf in August; and 21.79 billion scf in July, this year.

It stated that out of the 215.43 billion scf of gas produced in October, a total of 121.63 billion scf was commercialised, comprising of 29.29 billion scf and 92.34 billion scf for the domestic and export markets, respectively.

The gas flare rate in the month was 10.49 per cent, compared with the average flare rate of 9.36 per cent for the period of November 2015 to October 2016.

With the price of natural gas put at $3.54 per 1,000 scf as of December 22, the 87.03 billion scf flared translates to a loss of $308m or N94bn (using the official exchange rate of N305.25/dollar).

According to the draft National Gas Policy recently released by the Ministry of Petroleum Resources, the flaring of natural gas that is produced in association with oil is one of the most egregious environmental and energy waste practices in the Nigerian petroleum industry.

The draft policy states, “While gas flaring levels have declined in recent years, it is still a prevailing practice in the petroleum industry. Billions of cubic metres of natural gas are flared annually at oil production locations resulting in atmospheric pollution severely affecting host communities.

“Gas flaring affects the environment and human health, produces economic loss, deprives the government of tax revenues and trade opportunities, and deprives consumers of a clean and cheaper energy source.”

The ministry said under the gas policy, the government intended to maximise utilisation of associated gas to be treated for supply to power generation or industry.

“To ensure that flared gas is put to use in markets, the government will take measures to ensure that flare capture and utilisation projects are developed and will work collaboratively with industry, development partners, providers of flare-capture technologies and third-party investors to this end,” it added.

According to the gas policy, the current gas flare penalty of N10 per 1,000 scf of associated gas flared is too low, having been eroded in value over time, and is not acting as intended, as a disincentive.

“Consequently, the low penalty has made gas flaring a much cheaper option for operators compared to the alternatives of marketing or re-injection. The intention of government is to increase the gas flaring penalty to an appropriate level sufficient to de-incentivise the practice of gas flaring, whilst introducing other measures to encourage efficient gas utilisation,” it added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

FG to Partly Fund Six Rail Projects Connecting All Regions

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rail project

FG to Partly Fund Six Rail Projects Connecting All Regions

The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.

In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).

Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.

The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.

Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.

We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.

He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.

“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”

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Economy

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

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FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.

The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.

Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.

The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.

Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.

Potential Travelers can book via three ways:

1. Mobile app
2. Website
3. POS or Cash at the station

A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.

Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.

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Economy

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

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Zainab Ahmed Finance Minister

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday said Nigeria’s Excess Crude Account (ECA) stood at $72,411,197.80 as of January 20th, 2021.

The minister disclosed this at the first National Economic Council (NEC) meeting of the year presided over by Yemi Osinbajo, Vice President and had in attendance State Governors, Federal Capital Territory Minister, Central Bank Governor and other senior government officials.

Ahmed said “Excess Crude Account (ECA), balance as at 20th January, 2021, $72,411,197.80; Stabilization Account, balance as at 19th January, 2021, N28,800,711,295.37; Natural Resources Development Fund Account, balance as at 19th January 2021, N95, 830,729,470.82.”

The minister also said President Muhammadu Buhari has approved N6.45 billion for the setting up of gas plants in 39 locations nationwide in an effort to increase COVID-19 treatment.

What is Excess Crude Account (ECA)

Excess Crude Account (ECA) is an account used to save the disparity in the market price of crude oil and budgeted price of crude oil as stipulated in the Federal Government Appropriation Bill.

Key Takeaways of Excess Crude Account (ECA)

  • Excess Crude Account (ECA) was established in 2004 by the Federal Government to stabilize Nigeria’s economy and smooth out the effect of crude oil fluctuation on Africa’s largest economy.
  • The ECA rose to its highest of $20 billion in November 2008 during the global oil boom when prices were above $100 per barrel.
  • Controversy, allegations of corruption, and uncertain performance have trailed the ECA since creation.
  • The balance plunged from $20 billion in 2008 to $72.4 million in January 2021.

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