Trans-Sahara gas line startup planned for 2015

Nigeria, Algeria, and Niger hope to start gas exports via the proposed 18-25 billion cu m/year Trans-Sahara gas pipeline (TSGP) in 2015, Algeria's energy minister, Chakib Khelil said.

Uchenna Izundu
International Editor

BRUSSELS, July 18 -- Nigeria, Algeria, and Niger hope to start gas exports via the proposed 18-25 billion cu m/year Trans-Sahara gas pipeline (TSGP) in 2015, Algeria's energy minister, Chakib Khelil told OGJ 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 $10 billion project was estimated 6 years ago at $7.5 billion (OGJ Online, Nov. 28, 2001).

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-in. pipeline from Nigeria to Algeria's Mediterranean coast at Beni Saf and subsea pipelines of 20-in. between Beni Saf and Spain.

The proposal, which has been on the drawing board for at least 20 years, is now feasible, Khelil told OGJ, 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 500 billion cu m of gas in 2020. Europe's Energy Commissioner Andris Pielbags cautiously welcomed the pipeline at the conference, stressing the need for Europe to diversify gas suppliers and enhance security of supply. Pielbags, 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 Chukwuku, 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. Chukwuku told OGJ 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. Chukwuku 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 Chukwuku stressed that they are working in partnership, although Chukwuku 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 OGJ 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 the week of July 9, he said, to determine how the country would participate.

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.

Contact Uchenna Izundu at uchennai@pennwell.com.

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