BusinessDay 24 May 2017

Wednesday 24 May 2017
gas
C002D5556
BUSINESS DAY
03
WEST AFRICA ENERGY
Industry skills gap, gas flaring
impede West Africa competitiveness
KELECHI EWUZIE
West Africa
countries
like Nigeria,
Ghana,
Cote
D’ivorie with their combined
years of engagement
in commercial production
of gas have continue
to struggle with issues
around shortfall of required
industry skills and
gas flaring.
Attracting appropriate
skills and its resultant
wage bill remain the biggest
challenge confronting
the gas industry. The
most difficult vacancies
to fill in the industry in a
country like Ghana are
drillers, engineers, mangers,
production and operation
workers.
The main causes of the
skills shortages in Ghana
could be attributable to
the immaturity of the industry,
and insufficient
capacity building in the
acute areas. Also, demand
for skilled labour exceeds
the supply, insufficient
skilled applicants, competition
for labour among
the oil companies and
high cost of labour.
Aside the skills shortfall
concerns, industry
experts opine that gas
flaring in West Africa gas
sectors pose significant
challenge that needs to be
addressed.
Close industry watchers
observe that Gas flaring
among other things affect
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.
Gas flaring has negative
impact on the economics
of the nation in terms of
loss of funds and revenue.
Report from Nigerian National
Petroleum Corporation
(NNPC) indicates
that in 2016 Nigeria lost
N217bn to gas flaring; in
Ghana there is an estimated
loss of 1.2 million
daily in revenue for either
flaring the gas or delay in
utilising the associated
natural gas by the Ghana
Gas Company.
Giving the zero gas flaring
policy by Ghana National
Petroleum Corporation
(GNPC), the need
to monetize this associated
gas became imperative.
Hence, the establishment
of Ghana National
Gas Company at Atuabo
to harness the potential
of the associated gas to be
utilised as domestic usages
and industrial purposes.
In Nigeria, the ministry
of petroleum resources
through the minister for
State for petroleum, Ibe
Kachikwu was quoted to
have said that under the
gas policy, the government
intends to maximise
utilisation of associated
gas to be treated for supply
to industries.
“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,
Snapshot
N217bn
Estimated
amount lost
by Nigeria to
gas flaring in
2016
development partners,
providers of flare-capture
technologies and third
party investors to this
end,” he was quoted to
have said.
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.
It is the expectation of
industry experts that collaborative
efforts with right
investment climate, government
policies, appropriate
capacity building
and other proactive measures
are needed to surmount
the obstacles if the
industry would continue
to play significant role in
the West Africa’s economy.
Brief
Nigeria:
Reps attempt to amend NLNG Act
without shareholders’ involvement
borders on illegality
An amendment
to the Nigeria
LNG Limited
(NLNG) (Fiscal
Incentives, Guarantees
and Assurances) Act
without following the
laid down process stipulated
in the Act for any
amendment would be
contrary to the Rule of
Law. This is the reaction
of the General Manager,
External Relations at
NLNG, Kudo Eresia-Eke.
Eresia-Eke was responding
in Abuja, to
the sponsor of the NLNG
Act Amendment and
member of the House of
Representatives, Honourable
Leo Ogor, during
a live television programme,
Focus Nigeria,
on African Independent
Television (AIT).
KBR has announced
that it
has been awarded
a Front-End
Engineering Design
(FEED) and project management
services contract
for Oman Liquefied
Natural Gas LLC (Oman
LNG) in Qalhat, Oman.
Oman LNG operates
three liquefaction trains
with a total nameplate
capacity of 10.4 million
tonnes per annum
(mtpa).
The project represents
KBR’s reentry into the
Oman market and supports
our strategic focus
Ogor had earlier stated
that the Guarantees and
Assurances in the Act were
not tampered with adding,
that the only amendment
contained in the Bill
as passed by the House
of Representatives was to
include the payment of 3
percent levy to the Niger
Delta Development Commission
(NDDC) levy to
make the Act compliant
with the NDDC Act.
Oman:
KBR awarded FEED for Oman LNG
on gas monetization in the
Middle East region.
“This contract confirms
KBR’s strong reputation as
one of the world’s preeminent
leaders in LNG facilities
and demonstrates the
trust that Oman LNG has
placed in KBR following
the successful development
of the original Front-
End Engineering Design
(FEED) of this world-class
LNG facility,” said Jay
Ibrahim, KBR President:
Europe, Middle East & Africa.
“We are committed
to expanding our footprint
in the Middle East and are
delighted at this opportunity
to reestablish KBR in
Oman and contribute to
Oman’s In-Country Value
(ICV) initiatives.”
Revenue associated
with this contract was
undisclosed and will be
booked into backlog of unfilled
orders for KBR’s Engineering
& Construction
business segment in the
second quarter of 2017.