The FINANCIAL — Egypt announced on December 7 that it will be a signatory to the “Zero Routine Flaring by 2030” initiative, a global effort to reduce gas flaring at oil production sites. The endorsement was signed by His Excellency Tarek El Molla, Minister of Petroleum and Mineral Resources, and announced at the opening of the EBRD workshop in Cairo, “Ending Routine Flaring of Associated Gas in Egypt”.
The “Zero Routine Flaring by 2030” initiative, introduced by the World Bank in 2015, brings together governments, oil companies and development institutions who recognise that flaring is unsustainable from a resource-management and environmental perspective, and who agree to cooperate to eliminate routine flaring by no later than 2030.
At the workshop, jointly hosted by the Ministry of Petroleum and Mineral Resources and by the EBRD, Eric Rasmussen, the Bank’s Director, Natural Resources, said: “The EBRD is deeply involved in initiatives in its countries of operations to reduce gas flaring. Gas flaring is not only a climate change hazard, it is also a waste of an important resource that could be better used to improve economic and social activities.”
The workshop, attended by government representatives as well as representatives from companies and stakeholders across the Egyptian oil and gas sector, also discussed a report on “Associated Petroleum Gas Flaring in Egypt: Addressing Regulatory Constraints”.
The EBRD-funded study makes recommendations on options for gas flaring regulatory reform that would help to improve the regulatory framework and thereby increase the utilisation of the associated gas that is produced together with the oil. The approach assesses the regulatory landscape in Egypt, reviews international lessons learned from gas flaring regulations and analyses the merits of different reform options for Egypt. This work builds on past technical assistance provided by the EBRD to identify viable technical solutions to reduce flaring in the country.
The report identifies seven key reform options for Egypt to strengthen the regulatory framework for utilising associated gas. This includes setting a comprehensive overall policy framework to address gas flaring. The endorsement of the “Zero Routine Flaring by 2030” initiative is an important part of setting this policy direction.
Other recommendations include steps to strengthen the framework for monitoring and reporting gas flaring, underpinned by adopting industry-wide standards for measurement. Streamlining the investment approval process, clarifying regulatory responsibilities, and providing an enhanced role for stakeholder engagement also feature as recommendations, according to the EBRD.
The EBRD and other international partners are already in discussions with counterparts in Egypt on taking some of the recommendations forward. The study has benefited from close engagement by the Ministry of Petroleum and Mineral Resources, and this cooperation is set to continue as the recommendations are developed further.
Associated gas is found with deposits of petroleum, either dissolved in the oil or as a free “gas cap” above the oil in the reservoir. It is extracted along with the oil and, traditionally, has been released or flared as a waste product. As a result, about 150 billion cubic meters of associated gas is still flared annually around the world. This amount is equivalent to about half of Europe’s natural gas consumption. If used to produce electricity, it would be enough to meet the entire demand of the African continent. When flared, it produces around 350 million tonnes of CO2, or 10 per cent of the annual emissions of Europe.
The gas can be used in several ways after processing: sold and included in natural-gas distribution networks, used for on-site electricity generation with engines or turbines, reinjected for enhanced oil recovery, converted from gas to liquids producing synthetic fuels, or used as feedstock for the petrochemical industry.
Gas flaring is a source of local pollution, global warming and a waste of a valuable fuel source. Egypt ranks 11th among the top gas-flaring countries in the world. Capturing the over two billion cubic metres of gas flared in the country could provide five per cent of national energy needs and add US$ 300 million a year to the Egyptian economy.
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