Conoco engineer: West African Gas Pipeline 'not cost-effective'
The controversial and much-hyped West African Gas Pipeline project will not be cost-effective, said Michael Choi, a Conoco Inc. senior engineer, speaking at a conference of the Society of Petroleum Engineers in Abuja last week. Choi proposed shipping compressed gas by tanker instead, saying it would be faster and less expensive.
ABUJA�The controversial and much-hyped West African Gas Pipeline (WAGP) project will not be cost-effective, said Michael Choi, a Conoco Inc. senior engineer, speaking at a conference of the Society of Petroleum Engineers in Abuja last week. Choi proposed shipping compressed gas by tanker instead, saying it would be faster and less expensive.
Chevron Corp. leads the WAGP project, which would transport up to 120 MMcfd of associated gas from Nigeria's prolific oil fields to neighboring countries Benin, Togo, and Ghana. Some environmental groups say the pipeline could cause great environmental damage.
Nigeria has proven gas reserves of 124 tcf, or 17 billion boe. However, Nigeria has little domestic demand for gas. An estimated 65% of associated gas production is simply flared. WAGP is one of several projects intended to stop gas flaring in the country.
Presenting a paper entitled "Nigeria Stranded Gas Management Options," Choi noted that the transnational gas pipeline network project is bedeviled by "unresolved issues relating to right-of-way, national agreements, and transit charges."
The pipeline network also would be open to loss of control, which could introduce other risks associated with sabotage and political disputes, he maintained. Nigeria's products pipelines, and recently an oil pipeline, have been plagued by illegal siphoning and several related fatal accidents in recent years.
Furthermore, said Choi, much of the budget for WAGP would be spent outside Nigeria. Choi observed, "Virtually all of the $400 million of estimated cost of the West African pipeline project would be spent outside Nigeria for the large-diameter pipe and offshore pipelaying services."
He argued that, in contrast, 85% of the cost of implementing the alternative he suggests would be for the purchase of carriers.
Choi said the project would have been implemented in a faster, cost-effective manner using a high-pressure containment system made up of 6-in. pipe spiral-coiled into a carousel and manifolded for installation on an ocean carrier. The carrier would then deliver the gas to the appropriate destination.
These carriers, he said, would be the smaller barge type that is more suitable for the short distance from Nigeria to Ghana through the other West African countries involved in the scheme.
Choi said that, as Nigeria already has the capability to construct barges, "There is the possibility for Nigeria to retain the work and contribute to the local economy, as well as reduce the need for foreign exchange."