Total, Gazprom interested in Trans-Sahara gas line

Uchenna Izundu
OGJ International Editor

LONDON, Feb. 26 -- Total SA and OAO Gazprom are both interested in the ambitious 4,400-km Trans-Sahara gas pipeline (TSGP) that would deliver Nigerian gas to Europe by 2015.

Speaking at an industry conference in Abuja, Guy Maurice, managing director of Total Exploration & Production in Nigeria, said, "Total believes this is a long-term strategic diversification for Nigeria, which is quite interesting. I take this opportunity to mention publicly that Total is ready to become involved in this project."

Vladimir Ilyanin, managing director of Gazprom Nigeria, said, "We have the opportunity here to offer some solutions that we have come across. We have experience of running similar long, large-scale projects."

Ilyanin added that world gas prices needed to increase from current levels for the TSGP to be viable. Gazprom is keen to develop a presence in Nigeria with plans to invest about $2.5 billion dollars in infrastructure for the development and production of Nigerian gas. It hopes to conclude a multibillion joint venture on Nigerian oil and gas exploration and production by the end of March, he added.

The pipeline is expected to cost $12 billion and has been incorporated into Nigeria's gas master plan, which is the government's initiative to monetize its gas reserves with an emphasis on the domestic market and power generation.

Nigeria National Petroleum Corp. (NNPC) is working with Sonatrach to implement the project and is finalizing a memorandum of understanding. Whether they can reach their target start date is doubtful considering the number of political and commercial obstacles that remain.

Mohammed Sanusi Barkindo, group managing director of NNPC, said that signing the MOU would demonstrate "to the international community our resolve to strengthen our bilateral relations as well as our commitment to pursue the project," adding, "We will revisit the MOU and assign the commercial and technical issues to the joint venture agreement that will govern the project." Niger, a transit country for the pipeline, will also be involved in the final MOU.

Feasibility studies have demonstrated that the 30 billion cu m/year pipeline is commercially viable and would have a multiplier effect on the economies of participating nations, Barkindo added. He said the project remains a unique opportunity for both countries to diversify their energy supply to gas.

NNPC wants to be involved in the entire process up to the marketing in Europe. "We fully intend to maximize value in the entire gas chain," Barkindo said.

Mohammed Mezaine, president and chief executive officer of Sonatrach, said Algeria was interested in the Nigerian upstream element of the TSGP and would use its existing gas pipeline network and storage facilities for the project.

Contact Uchenna Izundu at uchennai@pennwell.com.