Global Gas Flaring Reduction (GGFR)

US-Indonesia Energy Investment

Roundtable

Bent Svensson

Program Manager GGFR/World Bank

February 6. 2012

Jakarta

Global Gas Flaring Reduction (GGFR)

US-Indonesia Energy Investment

Roundtable

Bent Svensson

Program Manager GGFR/World Bank

February 6. 2012

Jakarta

2/21/2012 1

GGFR Initiative – General Context

• Created in 2002 at the World Summit on Sustainable Development in 

Johannesburg 

• Objective: 

– Reduce gas flaring and GHG emissions

– Avoid waste of valuable resources 

– Contribute to energy efficiency and climate change mitigation– Monetization of associated gas through domestic use or export alternatives

• Means:– Public – Private Partnership to facilitate gas flaring reduction

Mission Statement GGFR is a catalyst for reducing wasteful and undesirable practices of gas

flaring and venting through policy change, stakeholder facilitation and project implementation

Mission Statement GGFR is a catalyst for reducing wasteful and undesirable practices of gas

flaring and venting through policy change, stakeholder facilitation and project implementation

Mission Statement GGFR is a catalyst for reducing wasteful and undesirable practices of gas flaring and venting through policy change, stakeholder facilitation and project implementation

Mission Statement GGFR is a catalyst for reducing wasteful and undesirable practices of gas flaring and venting through policy change, stakeholder facilitation and project implementation

GGFR Partners

Countries/(NOCs)Algeria (Sonatrach)Angola (Sonangol)Azerbaijan (SOCAR)Cameroon (SNH)Ecuador Equatorial Guinea GabonIndonesia IraqKazakhstanKhanty Mansiysk (Russia)Mexico (Pemex)NigeriaQatar (QP)UzbekistanKOC Kuwait

DonorsEUNorwayFranceUSA 

Oil companiesBPChevronConocoPhillipsEniExxonMobilMarathon OilMaersk Oil & GasPemexShellStatoilTOTAL

Associated PartnerWartsila

OrganizationsThe World BankEBRD

GGFR is  financed by Partner contributions from:

• An estimated 135 billion cm of gas is being flared & vented globally each year

– Approx 60% more than Indonesia’s total gas production

– $30 – 35 Billion per year loss value

• Approx. 360 million tons of carbon dioxide into the atmosphere each year

– Annual emission from 77 million cars 

– Output from 125 medium sized coal power generation plants

• Technological and policy reform requirements  are generally well understood

Gas Flaring –Magnitude of the Issue

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

90,000

100

110

120

130

140

150

160

170

180

190

200

Oil

prod

uctio

n, 'o

oo b

/d

Gas

flar

ed, b

cm

Gas f laring Oil production

Global Gas Flaring from Satellite Data

6

Flaring and Venting in Indonesia

• 2009 estimates: 270‐350 mmcfd (2.8‐3.6 

bcm) is flared 

• ~ 10% of Indonesian gas consumption

• Indonesia rank # 10 globally

• GHG emissions ~10 mln tonnes of CO2 

eq.

• CH4 vented volumes are unknown

• Black Carbon emitted during flaring 

increases the warming effect of 

flaring

• $500 mln in lost revenues including  

lost government share

Flaring in Indonesia (BCM/yr)

3.0

2.5

2.0

1.5

1.0

0.5

3.5

Flared Gas Utilization Options

• Gas to power – substantial potential in Indonesia

• Sale to PGN system

• Gas re-injection, including EOR

• Gas processing for extracting liquids

• CNG

• Small-scale LNG

• GTL?0

200

400

600

800

1000

1200

1400

1600

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Oil p

rodn

kbb/

d

bcm

Indonesia Flared volumes and oil prodn

Flared volume (bcm) Oil prodn (kbbls/d)

Source: NOAA & BP Statistics

Key challenges in Indonesia

• No reporting of up to date relevant data by field

• Lack of adequate regulatory framework for upstream flare and vent management – but work is underway

• Large number of small flares & vents ~600 fields

• Lack of developed gas infrastructure (limits options, increases cost)

• Low domestic gas prices

• Oil production level cannot be compromised

GGFR History in Indonesia

• Indonesia joined the partnership in 2003

• Since then CDM & gas utilization studies  

• Update to Indonesia Associated Gas Survey and Upstream Natural Gas Data Management System Design in 2009

• Assistance to DG Migas in policy and regulation– Study on International Practices in Flaring and Venting Regulation and their Adaptation for Indonesia

Key recommendation 

Introduce regulations for flare and vent management

Gas  Flaring Regulation in Indonesia

Green Oil and Gas Industry Initiative (GOGII)

•Reduction of gas flaring of 40% by 2014 (with wider application of CDM)

•Elimination of gas flaring by 2025

Study Recommendations for regulation•Prohibition of routine and continuous flaring and venting•Time‐limited exceptions granted for existing fields

– Subject to economic and technical test•Regulation should not be unduly burdensome•Reliable and accurate data required•Flaring must comply with Minimum standards•DG MIGAS most appropriate agency to regulate flaring

Next steps

• Drafting  and implementing regulations

• GGFR Phase 4  2013‐15• Scale up of program to sustain the down‐ward global trend in flaring reduction

• Deepen GGFR’s work in Partner countries • Gas for Development (G4D)

• Broader program on gas development

• Developing gas markets and gas utilization options

• in particular the interface with power

GGFR’s Vision is...

Thank you for your attention!www.worldbank.org/ggfr

Global: Satellite flaring volume estimation

Volumes in bcm 2006 2007 2008 2009 2010 Change from 2009 to 2010

Russia 50.0 52.3 42.0 46.6 35.2 (11.4)Russia excl KM 27.6 28.1 22.0 24.1 19.3 (4.7)Russia KM 22.5 24.1 20.0 22.6 15.9 (6.7)Nigeria 18.6 16.3 15.5 14.9 15.2 0.3Iran 12.2 10.7 10.8 10.9 11.3 0.4Iraq 7.2 6.7 7.1 8.1 9.1 1.1Algeria 6.4 5.6 6.2 4.9 5.4 0.5Angola 4.0 3.5 3.5 3.4 4.1 0.7Kazakhstan 6.2 5.5 5.4 5.0 3.8 (1.2)Libya 4.4 3.8 4.0 3.5 3.8 0.3Saudi Arabia 4.2 4.2 4.3 3.9 3.7 (0.3)Venezuela 2.1 2.2 2.7 2.8 2.8 0.0Mexico 2.1 2.7 3.6 3.0 2.5 (0.5)Indonesia 3.2 2.6 2.5 2.9 2.3 (0.6)China 2.9 2.6 2.5 2.4 2.1 (0.3)Canada 1.7 2.0 1.9 1.8 2.1 0.2USA * 2.0 2.1 2.3 2.0 2.1 0.0Uzbekistan 2.9 2.1 2.7 1.7 1.9 0.1Qatar 2.3 2.4 2.3 2.2 1.9 (0.3)Oman 2.3 2.0 2.0 1.9 1.8 (0.1)Malaysia 1.9 1.8 1.9 1.9 1.5 (0.4)Egypt 1.7 1.5 1.6 1.8 1.5 (0.3)Total top 20 138 133 125 126 114 (11.8)Rest of the world 23 21 22 21 20 (0.4)Global flaring level 162 154 146 147 134 0.5

Partner countries in top 20 79.2 75.6 72.9 72.5 66.1 -6.4

Source: NOAA Satellite data* Coverage limited to GOM, Alaska and partial continental USA