When producing crude oil, water and gas is produced along with the oil. The water is purified and then pumped back in. It’s a bit different with the so-called associated gas: The gas can often be used, fed into an existing gas network, or re-injected back to where it originated. But sometimes none of that is possible, in which case so-called routine flaring of the gas takes place. And this soon to be a thing of the past!
‘Zero Routine Flaring’
This is where the World Bank initiative “Zero Routine Flaring by 2030” comes into play, which OMV endorsed beginning of 2017 . Governments, oil companies and development institutions are all taking part in the initiative. They have recognized that the routine flaring of gas should be avoided from an environmental perspective and goes against a responsible approach to resources. The initiative’s supporters have jointly committed to eliminate routine flaring completely by the year 2030. Flaring for safety reasons is unaffected, as it is deployed when required for the safety of plant operations. After all, safety comes first.
To fight climate change we believe we have a responsibility to handle resources responsibly. That’s why one of the top priorities of our carbon strategy is eliminating routine flaring. And that’s why we support the ‘Zero routine flaring’ initiative of the World Bank.
16,000 flares worldwide
Associated-gas flaring is carried out at oil production sites all over the world. Satellite data shows more than 16,000 of these flares in around 90 countries. Flaring results in approximately 140 billion cubic meters of natural gas burned annually, causing more than 300 million tonnes of CO2 to be emitted into the atmosphere. “There are thousands of gas flames from flaring around the globe. That’s too many – in terms of both the environment and the economy”, says Brigitte Bichler, who is responsible for Enviromental Management at OMV. Of course, the climate benefits from every single tonne of CO2 that can be saved. But it also makes no sense economically just to burn gas. Flaring associated gas is unproductive and is easier to avoid than other CO2 emissions.
What can be done with “associated gas”?
From a technical viewpoint, the gas can be re-injected into the oil reservoir to increase oil production. As it is “common” natural gas, it can also be applied anywhere that natural gas is used: For producing power, as a raw material for manufacturing chemical substances, for heating homes, fuelling CNG vehicles etc. “Since 2008 we have reduced our annual direct CO2 emissions by one million tonnes through energy efficiency measures in our production sites. We are thereby on the right track!”
Tunisia and Romania show how it can work
A project for gas utilization in Waha, in the south of Tunisia, is underway in a three-step process. At the beginning of the project there was a lack of infrastructure for utilizing the associated gas. In the first phase of the project, the gas will be compressed and fed through a newly built, 5km-long pipeline to the Tunisian gas market. The second step will see the installation of two vapor recovery units in order to handle the remaining low-pressure gas effectively. The construction of a 50km-long gas pipeline from the Anaguid Block to the Waha gas recovery will take place in the third phase. The whole project will save around 120,000 tonnes of CO2 emissions a year.
By using the associated gas for producing power, over 50% of our onshore upstream activity in Romania is independent of external electricity providers. In a few years we intend to be self-sufficient in this regard. This allows us to save on production costs as well as tonnes of CO2 emissions. These are genuine savings projects!
Romania is the Group’s star when it comes to cutting CO2
OMV Petrom is taking a different approach in Romania with Gas-to-Power (G2P) and combined heat and power plants (CHP): The gas will be converted into power or heat and re-used for energy consumption. There are currently 31 projects of this type with a total capacity of 65 MW. This corresponds to the annual electricity consumption of around 270,000 households. To be able to meet the entire onshore power demand of OMV Petrom in the long run, additional 13 power plants will be built in the coming years.
Zero Routine Flaring by 2030 Initiative
Initiated in 2015 together with the then Secretary General of the United Nations, Ban Ki Moon, to set an ambitious goal in line with the Paris Agreement on Climate Change. At present 22 governments, 29 oil and gas companies and 13 development institutions have endorsed the initiative. Governments and oil companies that endorse the initiative will publicly report their flaring and progress towards the initiative on an annual basis. Valued at a typical wholesale price of gas in the USA of around 4 US$/million Btu, the 145 billion cubic meters being flared every year would be worth around US$ 20 billion. OMV signed up to the Zero Routine Flaring Initiative in early 2017.