Saturday, June 06, 2009

Algeria, Nigeria May Sign Gas Pipe Deal Soon

Algeria, Nigeria may sign gas pipe deal soon-minister

Sat Jun 6, 2009 10:58pm

ALGIERS, June 6 (Reuters) - Algeria and Nigeria may sign an agreement soon on a multi-billion dollar pipeline to export Nigerian gas to Europe across the Sahara desert, Algeria's energy and mines minister said on Saturday.

"We have reached the deal and we may sign it shortly as all the problems had been solved. (Nigerian Oil Minister Rilwany) Lukman and myself will sign it," Chakib Khelil told Algerian state television.

"We would not have any problem to finance the project," he added.

The project, with capital costs estimated at $10 billion for the pipeline and $3 billion for gathering centres, would send up to 30 billion cubic metres a year of gas to Europe via a 4,128 km (2,580 mile) pipeline from Nigeria via Niger and Algeria.

Russian gas monopoly Gazprom (GAZP.MM), France's Total (TOTF.PA) and Anglo-Dutch energy giant Royal Dutch Shell (RDSa.L) are among the international firms to have expressed interest in taking part in the project.

The Movement for the Emancipation of the Niger Delta (MEND), which has shut down more than a fifth of Nigerian oil output since launching attacks on the industry three years ago, has warned that the planned project would be a target.

The European Union, which currently relies on Russia for a quarter of its gas and a third of its oil, has said the Trans-Sahara project could help diversify its energy sources.

Beyond the threat of militant attacks in Nigeria, the pipeline would also pass through northern Niger, parts of which are controlled by nomadic Tuareg rebels, and southern Algeria, where Islamic militant groups have long had a presence.

The pipeline has been on the drawing board for years.

Nigeria has estimated natural gas reserves of 180 trillion cubic feet, the seventh largest in the world. Its liquefied natural gas company Nigeria LNG says it already provides 10 percent of world supply, much of it to Europe and North America. (Reporting by Lamine Chikhi; editing by Tim Pearce)

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