Abstract

Following Nigeria's global acclaim as a dominant crude oil producer and exporter, the nation's natural gas industry has demonstrated a huge potential as a strong player in the emergent global natural gas market. Although Nigeria is yet to explore directly for gas, as most of its gas discoveries are incidental to production of crude oil; the nation has one of the largest natural gas reserves in the world. Currently estimated at about 187 trillion standard cubic feet, Nigeria's natural gas reserves are rated amongst the top ten largest in the world. Distributed evenly between associated and non-associated gas, most of the nation's natural gas production has been flared or re-injected to enhance greater crude oil recovery. However, gas flaring is accompanied by considerable environmental degradation, particularly in the Niger Delta, where the bulk of the nation's oil and gas resources are found. Also, Nigeria has been blamed for the emergent global climate change through its green house gas emissions. This has serious consequences for both regional and global environmental sustainability. Consequently, the nation's policy makers decided to capture the economic benefits associated with Nigeria's huge stock of natural gas and stem the damaging tide of environmental degradation. This development has informed the nation's gas flare-out target set for 2008, and imposed on the nation's oil and gas industry. Therefore, this paper provides a holistic framework for attaining the nation's flare-out target and ensuring compliance with elimination of global greenhouse gas emissions.

An Overview of Nigeria's Gas Industry
Natural Gas Reserve Potential

Nigeria is acknowledged as a major oil producing economy, despite this reality, the nation's real potential lies with its vast natural gas resources which remain relatively unexplored. The nation's natural gas reserves have been put at 194 trillion cubic feet (TCF) (World Bank, 2004). This places the nation as the seventh largest natural gas reserve holder in the world. Apart from the recoverable reserve estimate, there are yet-to-find gas reserves in Nigeria, given the largely unexplored position of the resources.

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