ECONOMIC ANALYSIS OF MONETIZATION OF NATURAL (FLARE) GAS USING MODULAR GAS TECHNOLOGY (MGT) SYSTEM AS STRATEGY FOR MANAGING GAS FLARING IN NIGERIA

Natural gas in association with oil is a source of revenue for Nigeria. Sadly, the Nation has not appreciably developed its flare mitigation policy. Gas flaring wastes resource that would have been captured and processed using Modular gas technology (MGT) system for power generation, petrochemicals, CNG or GTL projects, etc. The economic justification of flare gas monetization is seen in two considerations; the technologies must be technically feasible and economically profitable. The investment in flare technology for the harnessing of flare gas must be properly reviewed by considering changes in economic situations of the country. This paper examines the economic analysis of natural gas monetization in Nigeria using MGT as strategy for reducing gas flaring. The evaluation method comprises use of investment appraisal techniques such as Payout Time, NPV, IRR, etc. Since the project is considered long term, changes in economic situations foreseeable in the future were incorporated in the sensitivity analyses of the work. The results show that even for high tax rates and discount rates, the project is still profitable yielding positive NPV and IRR with low payout times. It further highlights that flaring of gas could be greatly reduced by monetization using MGT.