Vanguard (Lagos)
Hector Igbikiowubo
13 February 2007
Cotonou — THE West African Gas Pipeline Project, designed to supply gas from Nigeria to Benin, Togo and Ghana and ultimately Ivory Coast, missed its December take-off date on account of the activities of militants in the Niger Delta who have repeatedly vandalised the Escravos pipeline.
Dr. Edmund Daukoru, Nigeria's Minister of Energy, told journalists at a joint meeting of the Committee of Ministers and personnel of the West African Pipeline Company (WAPCo) in Cotonou, Benin Republic that the project was supposed to have been completed 18 months from the date of the Final Investment Decision (FID) and that this should have been in December last year.
"But we are in February and it is not yet completed because of a whole variety of reasons. So this meeting is being held to review jointly with WAPCO which is a bulk supplier to the three countries, everything is coming out of Nigeria. WAPCO is the bulk supplier jointly between Chevron and Shell. We want to review the status of the project and be sure that we make up for lost time and be sure that further delay is mitigated as much as possible," he said.
He admitted that the project had largely been affected by the scenario in the Niger Delta, and urged the media to get the militants to appreciate the impact of their activities.
"I really don't want to go into the nitty gritty of the causes of the delay. But it is a whole collection of things, including also the vandalisation of the Lagos-Escravos gas pipeline. At the end of the day, all of us in one form or the other are losers. I think if you can carry this message of persuasion, you will be doing the nation a very big service.
"There is a clause called take or pay -- if buyer is ready before seller, seller is obligated to the buyer and if seller is ready before the buyer, the buyer is obligated somehow to the seller -- it is a take or pay clause to make sure the parties pursue the project in absolute good faith. We really have work to do and from what I am hearing, some of the issues are really serious and we look forward to jointly tackle them. I am hopeful that we will make progress," he said.
Dr. Daukoru hinted that despite the setback, Nigeria would be able to meet its contractual obligation to supply gas to its neighbour customers, adding that aspects of the project would be ready before the end of the second quarter of the year.
"We have a shortcut option. We can supply gas without compression. It is called free gas. We can get gas from the three arms of supply --one coming from Utorogu, the other arm coming from the Chevron- Escravos system. If both arms can be ready by then, it would be a little bit possible to achieve free flow. That will help to mitigate delays - that is what we will be looking at," he said.
On commitments made by gas buyers, the minister said there were a number of private sector users ready for the product, adding that institutional customers in Ghana have committed to take 122 million standard cubic feet of gas per day, 22 million standard cubic feet of gas per day each in Benin and Togo.
On the planned visit of President Olusegun Obasanjo to signal the supply of 100 Megawatts (Mw) to the West African Power Pool (WAPP), the minister said arrangements between countries take a long gestation period. "The fact that this is happening now when Nigeria is a little bit low on capacity is simply coincidental. As a responsible member of the international community, you cannot enter into an arrangement long before now and when the date comes you renege because of a temporary hitch ," he said.
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