Royal Dutch Shell promises $2B project to cut gas flaring in Nigeria

LAGOS, Nigeria (AP) — Royal Dutch Shell PLC announced Wednesday it will spend more than $2 billion to sharply reduce the burning off of natural gas at its oil wells in Nigeria — gases that when burned contribute to global warming and sicken people living nearby.

In a statement, Shell said its Nigerian subsidiary would use the money to capture the natural gas released at 26 flow stations in the oil-rich Niger Delta. The company said it had planned the work there for some time but funding problems and concerns about security delayed the projects. Militants and criminals routinely sabotage pipelines and kidnap workers in the delta.

Shell said its subsidiary previously spent more than $3 billion to build similar gas-gathering projects at 32 other flow stations in Nigeria. The collected natural gas will be sold for use by power plants and industries, the company said.

Mutiu Sunmonu, the managing director of Shell's subsidiary, said it would reduce the gas released to "the lowest practical volume" but that some gas would still escape and be burned.

"Security and funding conditions permitting, we have a real chance to progress our flaring reduction plans through these key projects," Sunmonu said in the statement.

Shell, which drilled Nigeria's first oil well 50 years ago, is negotiating with Nigeria to renew its oil leases. While the company remains the largest player in the country, its CEO has said it can no longer count on Nigeria as a major moneymaker as attacks on its facilities continue and lawmakers consider increasing the government's cut on profits. Militant attacks last year let Angola overtake Nigeria as Africa's No. 1 oil exporter.

The gas fires, known as flaring, are caused by the burning of natural gas that is produced along with crude oil. Environmentalists describe it as one of the largest sources of greenhouse gases which cause global warming. Those living in the Niger Delta say the burning contributes to acid rain and causes respiratory illnesses. Flaring leaves their fishing villages bathed in light at all hours and kill the fish living among the creeks and swamps of the roughly 20,000-square-mile delta.

Nigeria flared off 14.9 billion cubic meters of natural gas in 2008 alone, second only to Russia, according to World Bank estimates. Nigerian laws call on companies to cut back on the amount of gas they flare, but many simply pay fines or the damage is ignored by Nigeria's corrupt and ineffective national government.

However, as production of natural gas became more profitable in recent years, Shell and other oil majors exploring in Nigeria have tried to harness the fuel they once let escape into the atmosphere.