This Day (Lagos)

West Africa: Nigeria, Algeria, Niger Seal $10bn Gas Pipeline Deal

4 July 2009


Lagos — Three African countries yesterday signed an accord to build a $10 billion trans-Saharan gas pipeline linking vast reserves in Nigeria to Europe.

The project would convey gas destined for the European market more than 4,000 kilometres (2,485 miles) from the Niger Delta in Nigeria via Niger and Algeria.

The head of Nigeria's state oil company, Mohammed Barkindo, said the agreement "gives this project the official stamp of approval from the three governments, directing the national oil companies of these three countries to begin in earnest the definitional phase of this project."

Petroleum and Energy ministers Rilwan Lukman of Nigeria, Chakib Khelil of Algeria and Mohammed Abdullahi of Niger signed the agreement in Abuja.

Agency reports said the first delivery of gas is scheduled in 2015.

"A market opportunity of about 15-20 billion cubic metres exists for the TSGP (Trans-Saharan Gas Pipeline) as from the year 2015," Lukman, also a former chief of the Organisation of Petroleum Exporting Countries (OPEC) said.

"Now that this agreement is in place...we will be talking with prospective partners who might be interested in going to bed with us on this project," Lukman added.

No date was announced for the start of construction.

But Lukman said the next step would be to establish the appropriate commercial, fiscal, legal and technical options ahead of the final investment decision. Already the Russian gas monopoly Gazprom has expressed an interest in the venture.

Last week Gazprom signed an agreement with the Nigerian National Petroleum Company (NNPC) establishing a 50-50 joint venture in oil, gas processing and transportation. It plans to invest 2.5 billion dollars in a series of projects in Nigeria.

Gazprom plans to build at a cost of between 400 and 500 million dollars a 360-kilometre gas pipeline running from south to the north. It will be the first trunk pipeline to become part of the Trans Saharan gas pipeline, Gazprom International's chief Boris Ivanov said last week.

Khalib, the Algerian minister, said financing the project was not likely to be a problem. "This project is feasible. It is a project that has all the conditions to be very successful," Khelil said.

"We are going to look at the interest of the three countries. Up till now, the will of the three countries, the vision of the three countries has allowed us to come this point," Khelil said.

Niger's minister, Mohammed Abdullahi, told reporters political uncertainty in his country "is not the type that will mortgage the future of a project of this nature." Nigeria claims proven gas reserves of about 183 trillion cubic feet, making it the seventh largest producer in the world, but a large chunk of it is wasted through daily flaring by oil producers.

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Author: royal.zenith
Tue Sep 1 15:55:06 2009

The Trans-Saharan Gas Pipeline should be regarded as strategic to the iol and gas development across africa especially, the trancient countries.This gigantic project has in stock a lot of benefits to the immediate communities of passage.Apart from the different plus that has already been highlighted by different experts,the following are other advantages:

1.TSGP will make it possible for the rural trancient cummunities to physically see government development activities going on in their villages for the first time which is aside the massive socio-economic activities that will nomally accompany such development project. 2.The project will also help the african engineers to practically benefit in form of technology transfer and up-to-date knowledge that will be deployed through -out the project life-span, which is the biggest in africa till date. 3.The security issue being raised from some observers should not discourage the sponsorsoring countries,but they should see the security treat as an opportunity to comprehensively tackle the security problem in the hitherto unsecured region ones and for all and serve as cattalist to the overall boosting of both the people and the pipeline.

4.All hands must be on deck to ensure that the project is timely executed in other not to jeopadise the enomous benefits that are accruable to the proper implementation of the project since it far outweighs the sumontable security treat.

Lastly,I really commend the effort the project team members from Nigeria and Algeria for tirelessly working to acheive the success of the signing of the MOU.

From Opadiji Oluseyi Peter (Abuja,Nigeria)Ex- Corp member [TSGP]

Author: Steve Klaber
Sat Jul 4 14:03:24 2009

Nigeria needs its gas for its own use. There are daily reports of fuel and electrical shortages.

Back before Adam Smith, the mercantile theory was that the wealth of nations was money in their government's treasuries. Government treasuries are necessary. But the real wealth of nations is in the sustenance of its people, and their employment in its provision. Exports should be from your surplus of renewable resources. Your descendants will have use for the non-renewable ones. Your energy resources are being viewed too much as a "government asset".

You cannot employ your people to solve their own problems with foreign money. Sell to yourselves first, at a high enough price to sustain your industry. Proper price eliminates such madness as flaring. Under pricing leads to both waste and shortages, for the illusion of "getting a break".

Author: kaparah
Sun Jul 5 15:34:36 2009

I second the well thought out comment by Steve Kabler that charity begins at home, in addition to: 1) The underlying cause for the agitation in the Niger Delta is yet to be resolved – it is not about money, it is about respect for human right and common decency. 2) What hope does this administration have in getting the crude oil to traverse 5000 miles to Europe if it cannot even feed the Kaduna refineries, successfully, which is less than 500 miles away from the source? 3) You need the permit from the Landlords, that have been so marginalized and abused for decades, first before you can tap, talk-less of shipping to far away land. Obviously, this visionless administration continues to think that this is business as usual, forget about the locals’ concern, just put the buggy before the horse when it ought to be the other way around. How do you hope to cure the disease if you have not, honestly, identified and address the symptoms? We shall see how the supply will take off after waisting money to construct the pipeline - Dream on, as usual.

Author: Guy
Sun Jul 5 05:02:29 2009

While this project seems good initially, they should not forget the situation between Russia and Ukraine, the countries where the gas pipelines will pass may demand gas for free, with Russia working to start the first phase of the project, Nigerian govt should take advantage of the fact that Russia been a people oriented state, has a vast experience of connecting gas to institutions and homes at a very cheap cost, which will reduce dependance on kerosine and fire wood which Nigerian masses depend on and which has brought untold woes and hardship, also the Russian National energy giant can single handedly bring the gas fleering to a permanent stop, please avoid corrupting this, rare oportunity to lay a solid foundation for Nigeria's heavy industry for the future as gas and nuclear energy can power most heavy industries than hydro that fluctuats in dry seasons

Author: curious
Sun Jul 5 13:27:50 2009

I have a sense of dejavo, first we sold people to Europe without considering the fact that our countries / continent needed these people, now they are gone.

Now we are selling our resources to Europe without consideration that our countries / continent needs these resources and it is possible that now we have signed on the dotted lines if we decide to use these resources Russia would refuse to agree and might even charge us for using our own resources.

Author: excisionist
Mon Jul 6 09:16:29 2009

The area through which the pipeline is expected to pass is infected with different Muslim terrorist groups, including Al-kaida. Only crazy people with the brain of cow rearers made rulers will come up with such ideas. This project is doomed right from the beginning. --- excisionist(at)gmx.com


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