Abu Dhabi seeks to be first Gulf state to end wasteful practice of gas flaring from oil wells, cutting emirate's carbon footprint.
ADNOC aims to snuff out flares
MUSCAT // The offshore division of the Abu Dhabi National Oil Company (ADNOC) will become the first in the Gulf to end wasteful burning of natural gas, known as "flaring", that contributes to the emirate's carbon footprint, a senior company official says. The Abu Dhabi Marine Operating Company (ADMA-OPCO) said it would not need international funding to help it snuff out its flares within five to seven years.
"It will be very difficult to go to zero. It is very expensive but we are looking to do it," Ali al Jarwan, the ADMA-OPCO general manager, told a conference on flaring hosted by the World Bank and the Abu Dhabi Government's clean energy company Masdar. "Norway is the major one to do this and if industrialised countries can do this, then Gulf countries can too." The Abu Dhabi Government policy has long mandated flaring reductions even when the projects were barely economical, Mr al Jarwan said.
Oil rigs, plants and refineries across the globe use flaring because they lack the infrastructure needed to capture gas that comes out of the ground along with oil. The practice wastes a valuable resource and contributes to global warming, emitting 400 million tonnes of carbon dioxide a year across the world, according to Global Gas Flaring Reduction (GGFR), an international partnership led by the World Bank.
That is slightly less than the entire carbon footprint of France. ADNOC's offshore divisions, which include the Zakum Development Company and two smaller companies, have already cut the amount of gas flared from 160 million cubic feet a day in 1990 to 4.5 million cu ft a day today, Mr al Jarwan said. The initial reductions were straightforward, he said, while stamping out the practice completely would require sizeable investments in new infrastructure. Other divisions in ADNOC looking to reduce flaring emissions are applying for carbon credits.
The credits, issued through the UN's Clean Development Mechanism (CDM) and traded on an international market, can be sold on to companies in industrialised countries that can use them to offset their emissions. One carbon credit is regarded as equal to one tonne of carbon dioxide, or in some markets, carbon dioxide equivalent gases. Masdar and ADNOC hope to receive credits on three projects to reduce emissions by the second quarter of 2012, said Shuvendu Bose, the CDM implementation manager at Masdar.
Together, the projects would earn 233,500 credits a year, worth about €3.1 million (Dh14.6m) at yesterday's prices on the European carbon market. The downside is that the process of issuing credits is slow and requires extensive paperwork. Only five flaring reduction projects have been granted credits since it was established in 2007, said Sam Nader, the director of Masdar Carbon. Mr Nader said flaring projects would hopefully receive increased funding under a new global climate change treaty that international leaders will discuss later this year.
"Gas flaring poses serious environmental challenges, particularly for those interested in promoting the sustainability of the hydrocarbon industry," he said. "The Middle East and North Africa region currently accounts for about 20 per cent of flaring, which is about 30 million cu metres of gas per year. Gas flaring reduction presents an obvious win-win solution." Abu Dhabi is no stranger to cutting flaring, even in the face of difficult economics, Mr al Jarwan said.
In 1973, the emirate's Government set up the Abu Dhabi Gas Liquefaction Company to capture gas produced offshore and refrigerate it for export by tanker. "There was a very marginal profit and it was a very costly investment at that time," he said of the decision to set up the company. Apart from improving ADNOC's environmental footprint, the Abu Dhabi Government's policy has freed up readily available gas resources, which are in short supply across the UAE.