GlobalData’s latest report, “Global Gas Flaring Market Analysis, 2020 – Over 12.5 Billion Cubic Feet of Associated Gas per Day Flared Globally Represent $24bn in Forgone Revenue Annually” indicates that over 4.6 trillion cubic feet of natural gas flaring took place globally in 2019.
The potential value of the flared gas can be as high as $24bn if priced at the European gas benchmark. Key countries in the world flared more than 3.5 trillion cubic feet of natural gas in 2019, which constituted more than $9.5bn in foregone revenue when priced at the US Henry Hub gas prices and over $19bn when priced at the UK National Petroleum Board (NPB) prices.
Some of the major oil-producing countries in the world, such as Iraq, Iran, Russia, the US, Venezuela, Nigeria, Libya, Indonesia, Angola and Algeria, are together responsible for over 80% of the associated gases flared globally in 2019. Recently, flaring in some countries, such as the US and Iraq, has increased considerably due to corresponding growth in crude oil production.
Global crude oil production and gas flaring by key countries, 2010–2019. Credit: GlobalData.
However, some of the major oil-producing countries, such as Nigeria, were able to decrease associated gas flaring in the past decade due to enforcement of government regulations, re-injection of associated gas and increasing utilisation of associated gas. Russia is also able to reduce flaring marginally, despite growing crude oil production, due to toughening regulatory measures. Also, various companies, such as SIBUR, are actively using associated gas as a feedstock for their petrochemical operations, contributing an overall decline in flaring volumes.
The utilisation of associated gas is one of the most effective means to reduce gas flaring and benefits both the upstream producers and the environment. Solutions for utilisation of associated gas flaring include re-injection of gas into wells to enhance recovery of oil, using as a feedstock for petrochemical plants and for power generation. Small-scale solutions for utilisation include mini GTL (gas to liquids) plants, mini / small-scale liquefaction plants and compressed natural gas (CNG) plants.