Technical and economical/financial feasibility analyses of flared gas recovery in Egypt from oil and gas industry from international/national oil companies’ perspectives

Egypt is an importer of energy, yet 5.7 MMSCM (200 MMSCF) of natural gas is flared every day and causes a negative environmental impact. Recovery of such significant amount is crucial and accordingly there are three alternative solutions to recover these gases, namely LPG/condensate extraction, recycling, or power generation. These alternatives were studied technically, financially, and economically, and results indicate that investors’ orientation and vision play a vital role in decision making especially when production sharing agreement is applied. The conflict of interest among investors was tackled and applied on a case study from different perspectives. Results indicate that the added value itself differs from one investor to another. In the case studied, international oil companies “IOCs” prefer recycling to achieve reasonable net present value “NPV” up to $40 million. National oil companies “NOCs” prefer generating power to achieve maximum net value added “NVA” up to $58 million, to maximize the environmental and social added value. The least feasible option is extracting LPG/condensate from the flared gas although Egypt is LPG importer. The conflict of interest and current oil prices are the reasons behind postponing such projects. So, Egyptian government should impose policies to reduce flared gas emissions and maximize benefits through these projects and this can be done by compromising with “IOCs” to ensure maximum financial/social benefits.