The long awaited trans-Saharan gas pipeline project is to be completed by 2020

|  By Anayo Ezugwu  |  Apr 10, 2017 @ 01:00 GMT  |

DESPITE the claim by the Energy Information Administration, EIA, that the trans-Saharan gas pipeline, TSGP, is being delayed by the Nigerian government, the Nigerian National Petroleum Corporation, Nigeria, NNPC, has said that the project is still on track. Maikanti Baru, group managing director, NNPC, said the Corporation would ensure collaboration towards the success of $12 billion TSGP.

Baru disclosed this while receiving Gloria Akobundu, national coordinator, New Partnership for African Development, NEPAD-Nigeria.

But the EIA in its 2016 country analysis on Nigeria’s oil and gas sector attributed the delay in the commencement of the Trans-Sahara Gas Pipeline to security concerns along the entire pipeline route, increasing costs, and ongoing regulatory and political uncertainty in Nigeria.

The EIA said the Trans-Sahara Gas Pipeline is not getting funds due to the oil price rout, which has affected the budget of the NNPC and all stakeholders in the project. Another concern is the security of the pipeline which may have to pass through parts of the militant-torn Maghreb region before eventually getting to southern Europe.

The $12 billion Trans Saharan Gas Pipeline is a 4,401 kilometres natural gas project to be constructed from Nigeria, starting from Warri, Delta State, to Algeria through Niger Republic, and from Algeria to Spain. It was conceived under the NEPAD Initiative championed by former President Olusegun Obasanjo, Thabo Mbeki of South Africa, Abdoulazeez Boutaflika of Algeria and Abdoulaye Wade of Senegal.

The idea of the trans-Saharan pipeline was first proposed in the 1970s. On January 14, 2002, the NNPC and Algerian national oil and gas company Sonatrach signed the Memorandum of Understanding, MoU, for preparations of the project.

In June 2005, NNPC and Sonatrach signed a contract with Penspen Limited for a feasibility study of the project. The feasibility study was completed in September 2006, and it found the pipeline to be technically and economically feasible and reliable.

On February 20, 2009, NNPC and Sonatrach agreed to proceed with the draft Memorandum of Understanding between three governments and the joint venture agreement. The intergovernmental agreement on the pipeline was signed by energy ministers of Nigeria, Niger and Algeria on July 3, 2009, in Abuja. Safety concerns about the operations have been heightened due to the In Aménas hostage crisis of 2013. Nigeria, Niger and Algeria are among the least secure areas in the region because of various active terrorist movements that destabilise them.

The pipeline will start in the Warri region in Nigeria and run north through Niger to Hassi R’Mel in Algeria. In Hassi R’Mel the pipeline will connect to the existing Trans-Mediterranean, Maghreb–Europe, Medgaz and Galsi pipelines. These supply Europe from the gas transmission hubs at El Kala and Beni Saf on Algeria’s Mediterranean coast. The length of the pipeline would be 4,128 kilometres (2,565 mi): 1,037 kilometres (644 mi) in Nigeria, 841 kilometres (523 mi) in Niger, and 2,310 kilometres (1,440 mi) in Algeria.

The annual capacity of the pipeline would be up to 30 billion cubic meters of natural gas. The pipeline was expected to be operational by 2015. The investment for the pipeline will be around US$10 billion and for gas gathering centres around $3 billion.

The pipeline is to be built and operated through the partnership between the NNPC and Sonatrach. The company would include also the Republic of Niger. Initially NNPC and Sonatrach would hold a total 90 percent of shares, while Niger would hold 10 percent.

Russian gas company Gazprom has negotiated with Nigeria about its possible participation in the project. Also Indian company GAIL, France’s Total S.A., Italy’s Eni SpA and Royal Dutch Shell have expressed interest in participating in the project.

According to the Algerian energy minister Chakib Khelil “only partners that can bring something to the project, not just money, should be there.” Energy ministers of Algeria and Nigeria have said that if things go well, there will be no need to bring international oil companies into the project and if the need for partnership in the project arises, not every partner will be welcome on board on the project.

It is expected to be operational from 2020. The federal government had committed $400 million for the commencement of the project, while an additional $450 million was raised through Eurobonds in 2014. The feed of a 48 inches pipeline from Calabar to Kano has been completed.

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