Sunday, 3rd December 2023

$12b trans-Saharan gas project to miss 2018 deadline

By Roseline Okere
13 March 2018   |   4:28 am
The $12 billion Trans-Saharan Gas Pipeline Project (TSGP), expected to help Nigeria achieve zero gas flaring by 2020, remains an illusion, 17 years after it was conceived.

The $12 billion Trans-Saharan Gas Pipeline Project (TSGP), expected to help Nigeria achieve zero gas flaring by 2020, remains an illusion, 17 years after it was conceived.

The project should have been completed this year.

Nigeria signed a treaty with Niger and Algeria in 2009 to build the pipeline, which should begin from Calabar and pass through Kano to the border.

The estimated length is about 4,400 km, with over 1,037 km in Nigeria, 853 km in Niger, 2,310 km in Algeria, and 220 km connecting Algeria to Spain.

In 2013, the Federal Government approved a budget of $400 million for commencement. But some national and international companies that showed interest, including Total and Gazprom, grew pessimistic on security along the pipeline route. They also worried about increasing costs.

A source told The Guardian that the delay in taking the Final Investment Decision (FID) on Olokola Liquefied Natural Gas (LNG), Brass LNG and the Nigeria LNG Train 7 project hindered commitment by financiers.

“The investors are aware that Nigeria is currently facing the challenge of meeting its gas obligation to neighbouring African countries through the West Africa Gas Pipeline Company, due to insecurity in the Niger Delta.

“If we are unable to deliver gas to Ghana and Togo, how can we meet the demand for gas in Europe through the Trans-Sahara Gas Pipeline? Ghana has started looking elsewhere for its gas supply and this is not good for the country and investors in the pipeline project,” the source said.

The e-mails to Total and Gazprom, inquiring about their levels of commitment to the project, were not replied to, after two weeks.

The Chief Infrastructure Officer, Infrastructure Concession Regulatory Commission, Adamu Umar, confirmed that the project is yet to move beyond the first stage.

According to him, the promoters are in charge of the situation, stressing that all necessary approvals have been granted. The investors, according to him, are consortiums of Nigerian and Chinese companies.

But an associate researcher at the Africa and Energy Programmes of the French Institute of International Relations (IFRI), Benjamin Auge, is of the view that the project could remain a dream for much longer.

He said: “On analysis of all the elements of the route and the geopolitical realities, it appears that there are more reasons to believe that the pipeline will not be constructed in the near future.

“On topography, there would certainly be a few difficulties that would weigh down on the cost of the project. An example is the Hoggar Mountains. But this would not be impossible for specialised companies. A study of the solutions proposed by the developers confronted by this sort of obstacles should wait until a final choice is made on the route.”

The Managing Director of Nigeria LNG Limited, Tony Attah, warned that Nigeria is losing competitive space in the LNG global industry. Therefore, it needs to fast-track all pending LNG projects in the country.

He said: “Nigeria started 24 months after Qatar. Qatar now produces 77 million tonnes per annum (MTPA) and is the number one LNG supplier in the world, while Nigeria is still on 22 MTPA. Australia is already flooding the market and will knock Qatar to the third or fourth place.

“In Africa, significant gas find in excess of 127 Tcf in Mozambique has created the potential for another African super player. Mozambique is expected to become the second-largest exporter of LNG by 2025, as the country steps up production from 10 MTPA in 2017 to an envisaged 50 MTPA.”

Speaking recently on the viability of the project, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, was, however, optimistic. According to him, the project is still on track, describing it as a veritable vehicle for Nigeria to strengthen economic relations with Algeria and Niger.

In this article