Flaring gas could be turned into profit: EBRD
A major waste of a natural resource can be turned into profitable development investments, said the EBRD President Sir Suma Chakrabarti today in London. In his opening remarks for the Global Gas Flaring Reduction Forum, organised by the World Bank and hosted by the EBRD in London on 24-25 October 2012, President Chakrabarti said: “Reducing gas flaring is a very profitable business opportunity with significant environmental benefits. However, there is still a considerable number of barriers that hinder project development and implementation.”
The huge volumes of oil-associated gas that is flared or vented around the world mean that this major resource waste could be turned into an opportunity. Flared and vented gas emits the same amount of CO2 as the entire Italian economy. If collected and sold, it would raise about US$ 50 billion annually at current gas prices.
The EBRD’s Managing Director for Energy Efficiency, Josue Tanaka, said that the EBRD is pushing ahead with the regional strategic market study in Russia, Kazakhstan, Azerbaijan and Turkmenistan. The findings of the study, which aims to identify bankable projects that can be financed by the EBRD, will be presented early next year in the countries’ capitals.
The EBRD has already successfully financed two projects aimed at reducing associated petroleum gas (APG) flaring in Russia, the country which accounts for a quarter of gas flared globally: Monolit and Irkutsk Oil Company (IOC). In the case of the Monolit project, a gas processing plant was built; and the IOC’s solution was to re-inject the gas into the reservoir using a gas cycling facility financed by the EBRD. Collecting and using this gas, mainly a by-product of oil development, requires specialist gas infrastructure which is difficult to justify in case of small and remote oil fields. “However,” adds Kevin Bortz, “with certain fields it is already possible to collect the gas. And as technology develops there will be more bankable projects where EBRD investment can make a difference and turn waste into a valuable product.”