African nations agree on $10 billion Trans-Saharan Gas Pipeline
06 Jul 2009
Three African nations Nigeria, Niger and Algeria signed an agreement to jointly construct the Trans-Saharan Gas Pipeline (TSGP) from Nigeria to Algeria for the transportation of African gas to the gas-hungry European nations at a cost of $10 billion.
The agreement for the ambitious project was signed by the Nigerian minister of petroleum resources Rilwan Lukman, Algeria's minister of energy and mines Chakib Khelil and the energy minister Mohammed Abdullahi of Niger in the Nigerian capital Abuja on Friday.
The project involves building of a 4128km gas pipeline (48-56 inch), with a transportation capacity of 30 billion cubic meters of natural gas across the Sahara desert. The cost of the pipeline is estimated to be $10 billion and the gas storage stations would require additional $3 billion.
It is envisaged that the project will go on stream by 2015, although the starting date has not been announced yet.
Nigerian minister said as the agreement is in place, the countries are now on the lookout for partners for the project adding that the next step will be to establish the appropriate commercial, fiscal, legal and technical options before taking the final investment decision.
A number of oil and gas majors have shown interest in the project including Russian gas behemoth Gazprom, France's Total, Italy's Eni SpA, Royal Dutch Shell as well as Gas Authority of India Ltd. (GAIL).
The pipeline will be built and operated jointly by the Nigerian National Petroleum Corporation (NNPC) and Algeria's national oil and gas company Sonatrach along with participation from the Republic of Niger. Initially, NNPC and Sonatrach would hold 90 per cent stake and Niger the remaining 10 per cent.
The plan for the pipeline conceptualised in the 70s took a step forward, when in 2002 NNPC and Sonatrach signed a memorandum of understanding (MOU) for the preparations of the project. A techno-economic feasibility study of the project was completed in 2006 which confirmed the viability of the huge project.
