Ogra split on flare gas consumption mechanism.

Byline: Khaleeq Kiani

ISLAMABAD -- The Oil and Gas Regulatory Authority (Ogra) is divided over the specifications, standards and process for commercial consumption of flare gas in the transport sector (through CNG stations).

The regulator has adopted different positions at different times on the use of flare gas produced in the oil and gas fields that cannot be transported through pipelines due to quality or economic issues. The flaring of such gas quantities are discouraged globally because of environmental concerns.

Under international commitments, the government has introduced flare gas utilisation guidelines and it is being sold as compressed natural gas selectively at limited CNG stations.

The standard petroleum concession agreement with exploration and production companies calls for its commercial utilisation and disallows its burning. However, the policy allows flaring in exceptional cases until commercial arrangements are made available by the government or its designated company. It is thus separated at the wellhead from the crude oil or natural gas and burnt or shifted to bowsers for commercial consumption.

Rising number of CNG station owners seek use of flare gas in vehicles

Because of increasing gas shortages particularly for the CNG sector, an increasing number of CNG station owners are seeking permission to utilise flare gas in vehicles, raising safety concerns. As a result, the government is considering coming up with a policy decision on the use of flare gas.

In November last year, Ogra supported the utilisation of flare gas subject to separation of acidic components as per natural gas quality standards notified by it.

In December again it reported that 'majority of the consumers of flare gas are CNG stations, as identified by the applicants seeking licence from Ogra for sale of flare gas'.

Ogra said the 'Utilisation of Flare Gas Guidelines 2013 of the federal government do not restrict utilisation of flare gas in the CNG sector rather in accordance with clause F(1) and G, flare gas can be sold to third party at a negotiated price mutually agreed specifications and provided the lease holder shall ensure compliance of applicable HSE rules, policies and industry standard practices'.

In yet another subsequent letter to the government, Ogra pointed out that transportation of flare gas through bowsers after compression in the oil and gas...