15 October 2012

Nigeria: WAGPCo to Resume Operation Soon

The West African Gas Pipeline Company (WAGPCo), operators of the West African Gas Pipeline (WAGP) system, announced at the weekend that its pipeline system, shut down in August after it experienced a loss of pressure around Lome in Togo, will resume operation before the end of the year.

The company also said it loses between $500,000 and $600,000 daily as the company had suspended all gas deliveries to its onshore stations as a result of the incident.

The $1billion WAGPCo, which transports gas from the country to the Republic of Benin, Togo and Ghana for power generation and other domestic uses, was shut down following the damage on its line near Lome, during a skirmish between the Navy and a third party vessel on August 28. Giving an update on the extent of repair on the damaged pipeline, Managing Director of WAGPCo, Mr. Charles Adeniji said the divers hired by the company have discovered that the pipeline was severed into two. He said two sections of the main pipeline which were badly damaged have been recommended for replacement.

Adeniji said the divers had removed the damaged pipe joint, adding that the remaining pipe ends have been aligned back to their original positions. He also said Line scraper, called "pigs" would be inserted into the line to remove water and debris in the pipeline.

Adeniji however assured that given the progress made so far, there is 90 percent possibility that the repair would be completed by November.

The WAGP started from Itoki area of Ogun State and goes through Agido near Badagry in Lagos, passing through 33 Nigerian communities and thereafter goes offshore.

N-Gas, which is jointly-owned by Shell, Chevron and the Nigerian National Petroleum Corporation (NNPC), buys gas from oil companies in Nigeria and transport the gas to its customers in Benin, Togo and Ghana, through the pipeline.

The International Project Agreement (IPA) signed in May 2003 by WAGPCo and the Government of Benin, Ghana, Nigeria and Togo, with the Secretariat of the ECOWAS as witness, provides that N-Gas be allocated a space in the pipeline that could transport up to 200million standard cubic per day of gas (200mmscf).

Before Tuesday's incident, N-Gas was being allocated 134mmscf space in the 475mmscf capacity pipeline but could only deliver about 60mmscf of gas to the pipeline, leaving the $1billion facility to be sub-optimally utilised.

Due to the non-utilisation of the pipeline by N-Gas, sub-regional ministers, otherwise referred to as the Committee of Ministers of the West African Countries involved in the pipeline project plan to amend the IPA to enable other entities to use the pipeline.

Shareholders in the West African Gas Pipeline Company (WAGPCo), include Chevron, Shell, NNPC, Volta River Authority, BenGaz and Soto Gaz.

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