Public Agenda (Accra)
16 October 2009
editorial
Almost twenty years ago, Ghana, Nigeria, Benin, and Togo began efforts at building a common gas pipeline project that will serve the energy needs of countries in the sub-region. The construction started in 2005 amidst much expectation particularly in Ghana, where many were expecting the gas flows to result in lower electricity tariffs.
The pipeline was scheduled to start operating in December 2007 but was delayed after leaks were detected in supply pipelines in Nigeria. The second delivery deadline was scheduled for February 2008, but regular deliveries were again pushed forward when one of the workers of the pipeline construction company, Willbros was shot and killed in Nigeria by armed robbers. The pipeline was commissioned in May 2008. Even though it has been ready for gas deliveries since December 2008 it is now uncertain when gas deliveries are expected.
Now, the West Africa Gas Pipeline Authority (WAGPA) says it is not to blame for the delay in gas flow. Rather, damages from the Nigeria end due to insurgent activities by members of the Movement for the Emancipation of the Niger Delta ("MEND") and an accident in Benin where a ship anchored and clipped the pipeline are the causes of the delay.
Besides, the West Africa Gas Pipeline Company is working to complete outstanding work on its Compressor Station at Lagos Beach, in Nigeria and Regulating and Metering stations in Tema, Cotonou and Lome by the end of 2009.
Official account suggests that the supply of gas depends on how early Nigeria can finish repair works. While citizens of the sub-region await, the cost of the project, which has pipelines running offshore for about 620 km from Badagry in Lagos, Nigeria to Aboadzi in Sekondi, Ghana, has skyrocketed. The project, initially estimated to cost US$600 million, is now expected to cost nearly US$1 billion, about 70% more.
With plans to harness and utilise associated gas from Ghana's Jubilee oil Field, it is not clear if Ghana still needs Nigeria's gas. It is also not clear how the development of gas infrastructure at Atuabo by GNPC will interface with the West Africa Gas Pipeline Project. What is becoming clear, however, is the fact that the West Africa Gas Pipeline would has outlived its usefulness before it delivers its first gas. Already, a consortium of four companies have been pre-selected to finance a 50% stake in Ghana's gas production infrastructure, and discussions have so far overlooked the West Africa Pipeline Project.
It is the view of Public Agenda that, the West Africa Gas pipeline project was not thoroughly thought through. The motivation was rather narrow and meant to serve as an escape for Nigeria as the Kyoto Protocol caught up with the country.
Ghana must now find a way to integrate its own plans for gas development into what now threatens to become a white elephant.
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