Turning natural gas from a source of tension into a source of income in Nigeria
It is widely accepted that flaring natural gas is environmentally damaging, but until recently the alternative to flaring has either been prohibitively expensive or even worse for the environment. The rise of the crypto economy creates an opportunity to monetise wasted gas in a new way, significantly reducing its environmental impact and creating new revenue streams for oil and gas companies, and PermianChain has a commercially proven approach that is ready to be deployed in Nigeria.
The Nigerian government has pledged to put an end to gas flaring by 2030, cracking down on a practice that has been commonplace in a country that has the largest oil reserves in Africa and is a major exporter of oil and gas globally.
The majority of oil deposits are accompanied by volumes of natural gas but the amount of gas tends to be too small to make it economic to put the infrastructure in place to bring it to market. As a result, the gas is either injected back into the ground, released into the atmosphere or flared.
Injecting natural gas back into the ground is expensive and releasing it into the atmosphere has massive long term environmental repercussions, but the impact of flaring is also significant, particularly for any communities around the well. This means that the practice tends to be prohibited in many countries.
There is a great deal of pressure on both the companies involved in the flaring and the Nigerian government itself, but any attempts to curb the practice have tended to be imperfectly implemented and weakly enforced. As a result, according to a June 2020 report by the International Energy Agency (IEA) despite a 70% reduction in flaring in the country between 2000 and 2018, flaring is still taking place at least 45 sites across the country.
While some oil companies which operate at remote sites have allegedly quietly continued to flare their gas, enhanced detection, utilising tools such as drones, could well mean that the industry will find itself under increased pressure over the next few years.
Logical, commercial response
There is a relatively simple way around the challenge that would reduce regulatory pressure and turn wasted gas from a source of tension and into a source of income.
The rise of the crypto economy is driven by a well-documented demand for energy that can be used to power data centres. These data centres are needed to complete the calculations that drive the blockchain systems that sit behind crypto projects.
Importantly however, the data centres do not need to be sited near offices, nor do they need to be large. This means that they can be placed unobtrusively on site at an oil project, and powered by gas that would otherwise have been flared.
Based on commercially tested projects
PermianChain and it’s affiliated companies have developed and implemented several projects in North America and is in the process of expanding activities into the Middle East and North Africa, helping exploration and production companies convert wasted gas into a revenue stream through a process of tokenization that unlocks energy credits and new income in the form of bitcoin. Projects can be manged either directly by the oil company itself or by a dedicated PermianChain project team.
The PermianChain approach offers a way to avoid regulation and potentially costly fines, enhances community relations and bolsters a project’s bottom line. From any perspective this makes it an approach worth investigating.
If you would like to discuss your project and how we can potentially help you, contact us by submitting this form.
PermianChain is a proprietary technology platform that brings together the crypto-mining and oil and gas sectors. Using a permissioned access blockchain, PermianChain makes it possible to utilise stranded and wasted energy resources, unlocking liquidity and transforming the way that oil and gas projects are funded, produced, bought and sold. Established in 2018, PermianChain Technologies is a pioneer member of the Blockchain Research Institute (BRI) and start-up member of the Petroleum Technology Alliance Canada (PTAC).