11 June 2018

Nigeria to Address Challenges Facing West Africa Gas Pipeline Project

Photo: The Guardian
Oil pipeline.

The Federal Government has stated that it plans to partner with other stakeholders to address the challenges hindering the targets set for the West African Gas Pipeline Project.

The Federal Government listed the challenges as disruptions in gas supply, high debt profile of some countries and crisis in the Niger Delta region which is affecting supply of gas to the pipeline.

Speaking at the West African Gas Pipeline Project's Committee of Ministers' Meeting in Abuja, Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, said Nigeria, along with the partner countries had nurtured the WAGP project and are looking at further addressing the challenges that had hindered the achievement of their set targets.

Kachikwu maintained that Nigeria will continue to play her part in seeing that all the partners work together with the aspirations of the project to achieve a greater integration of the West African region.

He said, "The WAGP Project is being celebrated all over Africa today as the flagship project for the New Partnership for African Development (NEPAD). Therefore, this project should be sustained with our cooperation from all parties.

"On the part of Nigeria, I am pleased to be able to welcome you all at a point when the Niger Delta is stable and gas supply from Nigeria is becoming more assured and also when more gas resources are being discovered offshore Lagos, which could present more option of gas supply to the West African Gas Pipeline Project."

He also said that more gas resources are currently being discovered offshore Lagos and also stated that the discoveries, along with the return of peace to the Niger Delta, would boost the country's gas supply to the West Africa Gas Pipeline Project.

Also speaking, Managing Director of West African Gas Pipeline Company, WAGPCo, Mr. Walter Perez, declared that though significant improvement had been recorded over the years in the company, the collective efforts of the committee are still required to attain the promise for further regional integration. He noted that irrespective of the fact that Force Majeure was yet to be lifted, WAGPCo had been able to upgrade its compressor which led to a growth in its output from 70 million British thermal unit, BTU, per day, to 85 million BTU per day in 2018. He said, "However, the situation has significantly improved as a result of work completed by WAPCo in 2018 to upgrade our compressor station in Nigeria to operate at reduced pressures."

As a result of this, we have been able to demonstrate the capability to transport over 85 million BTU per day.

"In addition, this upgrade has allowed us to be more consistent in delivering gas to our customers despite variations in pressure at Itoki. With the imminent completion of critical infrastructure projects in Nigeria, it is our hope and prayer that Force Majeure (FM) will be lifted or the Foundation value chain contracts restructured so that it will no longer be necessary to operate on a best endeavours basis." He announced that Ghana had paid a significant portion of its legacy debt to WAGPCo and additional payments are currently being made."

"I am happy to report that additional payments are currently in process. However, more work is needed to retire the debt. To this end, we are encouraged by the assurances given by the Ministry that the legacy debt will be fully retired in 2018," he explained.

Commenting on the Western Interconnection Project, he highlighted plans to use WAGP to enable gas to flow from Western offshore Ghana to the primary load centre for power generation at Tema. According to him, over the last couple of months, engineering works and related procurement activities had progressed, leading to the execution of a Construction Management Agreement with Eni, which would see the construction commencing at Tema and Takoradi imminently. He said, "Our industry is complex, dynamic, and evolving. It is a business in which we must be minded to have a long term view of success, tempered by near term realities. This is why WAGPCo is currently working with WAGPA to redefine the tariff structure for the WAGP.

"This is expected to promote increased utilization and diversification of both supply and off-take. Doing so will also enable gas from the WAGP to remain the fuel of choice in the West African sub-region?

"l believe deeply in the distinctive mission of the WAGP project and WAPCO's role in the sub-region. I also believe that the future of the WAGP lies in trusting that all partners will commit to their fair share of responsibility to effectively carry forward the objectives and the strategies that will make this ECOWAS dream a reality."

Nigeria

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