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INTERVIEW: Capterio sees gas flaring tool unlocking mitigation activity

Highlights

Hopes to raise awareness, offer solutions on flaring

Some 150 Bcm of gas flared, much close to pipelines

Preventing flaring also to help reduce CO2 emissions

London — UK-based Capterio hopes its new gas flaring data tool will raise awareness about the extent of the practice globally and trigger new activity designed to help end it.

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In an interview, Capterio CEO Mark Davis said he hoped the FlareIntel tool -- which tracks individual gas flares across the world -- would lead to stakeholders taking action to utilize gas that is currently flared.

Some 150 Bcm of gas is flared every year, according to estimates from the World Bank.

To put that into context, if it was a country, "flaring" would be the fifth-biggest consumer of gas in the world after the US, Russia, China, and Iran.

Much of that flared gas can instead be monetized -- Capterio estimates that more than half of flared gas volumes are located within 20 km of an existing gas pipeline.

It would also help reduce CO2 emissions as the volume of gas currently flared creates some 280 million mt/year of CO2 emissions.

And when the "methane slip" associated with incomplete combustion of flares is included, the emissions from flaring rise to at least 1.2 billion mt of CO2 equivalent.

'Leap forward'

Davis -- formerly an upstream exploration executive at Shell -- hopes the new Capterio tool will bring more awareness of the problem to all stakeholders, from upstream operators to governments and regulators.

"We believe that in many cases, flaring can be solved -- technically and commercially," Davis said. "We hope we're providing a game-changing leap forward that is going to unlock activity," he said.

The free-to-access tool uses satellite imagery to quantify gas flares from the thermal anomalies associated with gas combustion, which differentiates it from satellites used to measure, for example, methane emissions.

The tool provides annual data on flaring, including the name and operator of the host field, and proximity to infrastructure. "We'd be delighted if our data helps operators to do the right thing in ending flaring," Davis said.

Capterio -- which was created in 2018 -- also offers bespoke solutions and financing so that upstream operators can contract it to carry out work needed to monetize flared gas.

It has built a pipeline of commercial opportunities in the Middle East, West Africa, and North Africa, with first deals expected to follow later in 2021, Davis said.

"We have a big pipeline of projects," he said, adding that there was "so much to be done quickly to stay within our carbon budget that we don't mind also facilitating activity from other players."

"The rationale for the tool being free is to promote activity. It would be a great outcome if we can be helpful to the industry to promote them delivering on the flaring targets that they have -- in many cases -- committed to," he said.

Flaring factors

Davis said there were three main reasons why flaring occurs. The first is that flaring is often not sufficiently on the radar of big national and international oil companies.

The second is that flaring solutions are perceived to not be economically attractive, and the third is a lack of resources -- either the technical capability to end flaring or the finances to do it.

Capterio said its new tool would hopefully solve the first issue by raising awareness of flaring.

The FlareIntel tool, Davis said, could help solve the second issue by showing how close flares often are to existing gas infrastructure with Capterio then able to offer solutions, such as pipeline projects to link flaring sites to pipelines.

Davis said Capterio could also help solve the third problem by bringing financing and technical expertise for flaring-elimination projects.

According to Capterio, just ten countries are responsible for over 73% of total global flaring, though there is a wide variation in flaring intensity by country.

Venezuela, Algeria, Iran, and Nigeria stand out with flaring intensities 2-6 times the global average, while Canada, Saudi Arabia, and Norway have flaring intensities of less than one tenth of the global average.

In 2019, FlareIntel showed that the world's biggest flare was at the Santa Barbara facility in Venezuela, consuming almost 113 MMcf/d of gas.

"The notional value of the gas burnt at this flare is over $100 million/year, yet the flare is just 1.3 km from an existing gas pipeline and is within 3 km of a population centre of 50,000 at the town of Punta de Mata," Capterio said.

Davis said that countries that export gas to the EU could face issues if they don't tackle gas flaring in the future, as Brussels targets net-zero by 2050.

"There is going to be carbon border adjustments at some point -- if you're Algeria, Russia, Nigeria, or Libya, for example, you should be worried that your gas will not be able to compete because EU consumers want to buy clean gas," he said.

"If it is not enough incentive to say to suppliers 'look at the value you're wasting and money you could be earning' then they should at least take notice of the fact they are trying to sell gas to Europe where buyers might not buy because it is 'dirty'," he said.