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Africa

Nigeria, Niger, Algeria sign trans-Saharan pipeline deal

Text by NEWS WIRES

Latest update : 2009-07-03

Petroleum and Energy ministers from Nigeria, Niger and Algeria have signed an agreement to build a $10 billion pipeline to transport Nigerian gas across the Sahara to the Mediterranean and European markets.

AFP - Three African countries on Friday signed an accord to build a 10-billion-dollar trans-Saharan gas pipeline linking vast reserves in Nigeria to Europe.
  
The project will convey gas destined for the European market more than 4,000 kilometres (2,485 miles) from the Niger Delta in Nigeria, via Niger and Algeria.
  
The head of Nigeria's state oil company, Mohammed Barkindo, said the agreement "gives this project the official stamp of approval from the three governments, directing the national oil companies of these three countries to begin in earnest the definitional phase of this project."
  
Petroleum and Energy ministers Rilwan Lukman of Nigeria, Chakib Khalib of Algeria and Mohammed Abdullahi of Niger signed the agreement in Abuja.
  
The first delivery of gas is scheduled in 2015.
  
"A market opportunity of about 15-20 billion cubic metres exists for the TSGP (Trans-Saharan Gas Pipeline) as from the year 2015," Lukman, also a former chief of the Organisation of Petroleum Exporting Countries (OPEC) said.
  
"Now that this agreement is in place... we will be talking with prospective partners who might be interested in going to bed with us on this project," Lukman added.
  
No date was announced for the start of construction.
  
But Lukman said the next step will be to establish the appropriate commercial, fiscal, legal and technical options ahead of the final investment decision.
  
Already the Russian gas monopoly Gazprom has expressed an interest in the venture.
  
Last week Gazprom signed an agreement with the Nigerian National Petroleum Company (NNPC) establishing a 50-50 joint venture in oil, gas processing and transportation. It plans to invest 2.5 billion dollars in a series of projects in Nigeria.
  
Gazprom plans to build at a cost of between 400 and 500 million dollars a 360-kilometre gas pipeline running from south to the north. It will be the  first trunk pipeline to become part of the Trans Saharan gas pipeline, Gazprom International's chief Boris Ivanov said last week.
  
Khalib, the Algerian minister, said financing the project was not likely to be a problem.
  
"This project is feasible. It is a project that has all the conditions to be very successful," Khalib said.
  
"We are going to look at the interest of the three countries. Up till now, the will of the three countries, the vision of the three countries has allowed us to come this point," Khalib said.
  
Niger's minister, Mohammed Abdullahi, told reporters political uncertainty in his country "is not the type that will mortgage the future of a project of this nature."
  
Nigeria claims proven gas reserves of about 183 trillion cubic feet, making it the seventh largest producer in the world, but a large chunk of it is wasted through daily flaring by oil producers.

Date created : 2009-07-03

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