Efforts by Nigeria to earn certified emission reduction (CER) credits have received a boost, following the approval of an emission reduction project under United Nations Framework Convention on Climate Change (UNFCCCC) Clean Development Mechanism (CDM).
The new CDM project known as Asuokpu/Umutu Gas Recovery and Marketing Facility was registered at the weekend, bringing the total registered projects for the country to four (4). An indigenous Oil & Gas Producing Company, Platform Petroleum Company owns the facility.
CDM schemes already registered by the UNFCCC include Kwale Gas Project, the Pan Ocean Gas Utilization Project, located in Kwale, Ovade-Ogharafe (both in Delta State) and Adscan Methane Avoidance Project. The Pan Ocean scheme, for example, will cut emissions by an estimated two million tons of carbon dioxide (CO2) annually, and the credits will be sold to Nuon, a Dutch state utility.
The CDM allows emission-reduction (or emission removal) projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol. The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.
The Asuokpu/Umutu Gas Recovery and Marketing facility involves recovery of the dry associated gas that is currently flared at the Asuokpu/Umutu Marginal Field and delivery to the Nigerian domestic gas market for productive use as an energy product. It comprises installation of new compression facilities adjacent to the Umutu oil facilities and 45 km pipeline to transport the gas from the Asuokpu/Umutu marginal field to the existing gas system at Kale and further into the Nigerian Agip Oil Company (NAOC) gas network for beneficial use primarily within the Niger Delta.
The Minister of Environment, Mr. John Odey, and the Designated National Authority (DNA) in the Special Climate Change Unit of the ministry, said that the CDM project activity will, apart from contributing to the sustainable development of Nigeria by providing reliable gas supplies to strengthen the national electricity system, result in greenhouse gas emission reduction. He said that the new CDM project has the potential to improve national resource management through full utilization of the energy resources produced at the field. It would equally generate new employment opportunities for Nigerians and support the country’s gas flare-out policy. The project is Nigeria’s 3rd gas recovery project and the 4th registered CDM for the country.
Platform Petroleum Limited won the bid for the Asuokpu/Umutu Marginal Field and executed a Joint Venture Agreement with Newcross Petroleum Limited resulting in a 60/40 equity ownership of the field with Platform remaining the operator (Platform Newcross JV). Platform Newcross JV is currently finalizing the design of the infrastructure needed to implement a marketing option for surplus gas from the field. The installation and operation of this infrastructure is the CDM project activity.
The primary benefit of the CDM project activity is the reduction in the emissions of greenhouse gases and the productive use of the recovered gas.
This will serve as an important step in Nigeria’s efforts at using CDM to address the climate change issue. As Platform is a Nigerian owned company, it signifies the ability of local Nigerian companies and the society to participate in Clean Development Mechanism.