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Trans-Sahara gas line start-up planned for 2015
Nigeria, Algeria, and Niger hope to start gas exports via the proposed
18-25bn cmpy Trans-Sahara gas pipeline (TSGP) in 2015, Algeria's energy
minister, Chakib Khelil told at the Trans-Sahara Gas Pipeline Conference
in Brussels July 9.
Once built, the 4,300-km line would transport gas from the Niger Delta
in southern Nigeria through Niger and into Algeria and Europe. The $10bn
(EUR 7 bn) project was estimated 6 years ago at $7.5bn (EUR 5.5 bn). A
senior energy delegation from Algeria, Nigeria, and Niger were in
Brussels to promote TSGP to potential investors and European gas
consumers seeking to diversify gas imports.
The TSGP project
According to the feasibility report published by engineering company
Penspen Consulting, TSGP would comprise a 48-56-inch pipeline from
Nigeria to Algeria's Mediterranean coast at Beni Saf and subsea
pipelines of 20-inch between Beni Saf and Spain. The proposal, which has
been on the drawing board for at least 20 years, is now feasible, Khelil
told, because there is market demand in Europe. Europe's production
decline and environmental initiatives make the gas pipeline more
desirable, he said. Secondly, he said, is Nigeria's and Algeria's new
commitment to the pipeline within the framework of NEPAD [the New
Partnership for Africa's Development].
"The oil companies of each country have been instructed to carry out
feasibility studies," Khelil said. "Thirty years ago these entities
didn't have the experience or the money to do this. It's a project that
is meeting the needs of the consumers and the producers, and it is being
pushed very hard."
Europe expects to import 500bn cm of gas in 2020. Europe's Energy
Commissioner Andris Piebalgs cautiously welcomed the pipeline at the
conference, stressing the need for Europe to diversify gas suppliers and
enhance security of supply. Piebalgs, however, said it was important to
determine the availability of proved gas reserves, the feasibility of
the project, its economic viability, and the geopolitical developments
in the region. "The EU, however, can guarantee security of demand," he
said.
Tony Chukwueke, Director of Nigeria's Petroleum Resources, admitted that
Nigeria's export plans were ambitious, particularly as it is trying to
boost the use of domestic gas for electric power generation.
Nigeria's commitment
Nigeria currently has 180 tcf of proved gas reserves. Chukwueke told
that Nigeria is committed to supplying TSGP, using gas that would
otherwise be flared. It plans to eliminate gas flaring by 2008.
Instability in the Niger Delta is deterring potential investors from
carrying out major gas exploration and production, jeopardizing possible
future sources of gas, such as deepwater fields. Chukwueke said the
government is addressing this issue by tying every major project with
development in the Niger Delta -- such as refineries and petrochemical
plants -- to ensure that the region enjoys the benefit of investments.
Some sales details have yet to be worked out. No decision has been made,
for example, on how the gas would be sold into Europe, whether Nigeria
would be selling to Sonatrach to market or Nigeria directly accessing
the European market. Khelil and Chukwueke stressed that they are working
in partnership, although Chukwueke conceded that Sonatrach has more
experience than Nigeria in marketing gas to Europe. Initially, he added,
it would make sense to allow Sonatrach take the lead.
Khelil said, "It is whatever is the most interesting solution and the
most profitable."
Niger's energy minister, Mohamed Abdoulahi told that Niger does not know
how much gas it will offtake. The pipeline has Niger's support, however,
and a meeting was to be held to determine how the country would
participate, he said.
Khelil said the partners are welcoming any interested companies willing
to join, including India's state-run company GAIL India. Khelil said
there had not been any interest from Russia to participate in the
project.
