Federal Republic of Nigeria Interim President Goodluck Jonathan addresses the media in the aftermath of the announcement that the national elections would be delayed by two days. Technical and logistical problems were cited., a photo by Pan-African News Wire File Photos on Flickr.
Nigeria’s quest for permanent membership seat of the UN Security Council: Critical analysis (3)
Friday, 24 June 2011 00:00
Being the conclusion of a policy paper delivered by Malam Abdullahi Uthman Maiyaki, Asst. Director/Head, International Crisis Monitoring Unit, Nigerian Institute of International Affairs (NIIA), Kofo Abayomi Road, Victoria Island, Lagos, in May 2011.
CONSEQUENTLY, the Nigeria’s Trans-Sahara gas pipeline project attracted interest recently after a feasibility study reported to have been carried out by a United Kingdom Energy Consulting Firm – PENSPENPA, which gave the project a brighter prospect. It noted that, the project is “technically feasible and economically viable and that market opportunity of about 15 to 20 billion cubic meters exists for the Trans-Sahara Gas Pipeline Project comes year 2015”. (Source: “$10 bn TSGP: Nigeria, Algeria, reject new investors”, The Punch Newspapers, July 6, 2009, p. 15).
Furthermore, the Nigerian Petroleum Minister, Dr. Rilwanu Lukman while commenting further on the project recently during the signing ceremony of the Inter-governmental agreement on the TSGP project in Abuja between Nigeria, Niger and Algeria is reported to have disclosed that, this said “feasibility study costed $2 billion (N274 million) and has revealed an attractive market-window of gas supply sources, project economies and sensitivity analysis as well as optimum financial structure together with framework for regulation and governmental suspension. He further added that the project will carry 4000 kilemeters pipeline from Nigerian gas fields through Niger Republic, Mali and Algeria to European markets.”
Similarly, the Minister of Mines and Energy of the Niger Republic, Abdullahi Mohammed was reported to have assured smooth-passage for the project from his country despite the ongoing political dispute. The Algerian Minister of Mine and Energy, Dr. Chalib Kalil on the other hand, was reported to have allayed fears over financing the project, nothing that many multinationals had expressed keen interests having realized the viability of the project. He further cited the ongoing similar gas project between Algeria and Italy which he disclosed is being funded by the European Commission and assured that the Trans-Sahara Gas Pipeline (TSGP) project shall explore such opportunities. (Sources: “Work on $10 bn trans-Sahara gas project to begin in 2015”, The Guardian Newspaper, July 6, 2009, p. 21).
Furthermore, the Algerian Miners & Energy Minister commented further that “projects of this magnitude are usually financed 70-80 percent by the consumers who sign long-term sales purchase agreement” he added that in this project, sourcing of financing has to be through – the sales/purchases long-term contract that is enough guaranteed for the project. The stakeholders would however be required to invest 20-30 percent of their own money. On the threat of pipeline vandalisation, the Algerian Minister asserted that the pipelines shall be buried one metric underground and shall be protected by optic fibres devices to be supported by effective surveillance mechanisms. (Sources: “$10 bn TSGP: Nigeria, Algeria reject new investors”, The Punch Newspaper, July 6, 2009, p. 15). In a related development, Dr. Khalil the Algerian Minister also revealed that the project is 90 percent owned by the Nigerian NNPC and Algeria Sonatrach, with Niger holding the remaining stake. He further added that 20 percent or $2bn shall be equity open to companies to take either one or two percent stakes. (Source: “Oil firms show interest in Trans-Sahara gas Pipeline”, The Punch Newspaper, July 1st, 2009, p. 17).
Energy analyst concede that the TSGP project when it commence in year 2015, shall promote the ongoing desire for regional integration of the economies of the African continent; it shall also improve the standard of living of the peoples of the sub-region by providing employment opportunities to peoples in countries where the project shall be transiting during the construction of pipelines and could equally reduce green house emission respectively.
Similarly, the strategic significance of this project has been further highlighted by the Executive Director, International Energy Agency Nobov Tanaka when he was reported to have observed that “the European Union would offer both financial and political backing for the pipeline project”. (Source: “Oil Firms show interest in Trans-Sahara gas pipeline”, The Punch Newspaper, July 1st, 2009, p. 17).
European Union Backed Gas Pipeline Project with the Balkans
The increasing uncertainty about smooth gas energy supply from Russia to Western Europe has resulted to yet another desperate agreement entered between the European Union and the Balkans signed on July 13, 2009. The project Nabucco is expected to pump billions of cubic meter gas from the Caspian Sea to Austria via Turkey, from the Balkan states of Bulgaria, Hungary, Romania, by passing Russia. The 3,300 kilometer (2000 miles) distance gas pipeline project shall be operational by 2014, at an estimated cost of 7.9 billion euros equivalent of ($10.9 billion). (Source: “Russia strings off Europe gas pipeline deal”, The Daily Champion Newspaper, July 17, 2009, p. 30).
Energy analysts observed that disturbed by erratic cut to gas supply by Russia in any dispute with its neigbours, European Union had to commit itself to a gas project Nabucco, instead of the Russian own South Stream gas project which would have been much closer in distance to Europe and economically feasible/viable. It is this desperation for gas energy resource by European Union highlighted in the preceding paragraphs that Nigeria should take advantage to actualized the full development of its gas energy sector in the years ahead for both domestic needs, economic purposes and as instrument of diplomatic engagement.
The Development of the Gas Energy Resources in Nigeria
The flag-off of the construction works of the onshore gas plant at the Escravos gas project held on March 234, 1995 and the starting-up of the NNPC/Chevron’s Escravos gas project of May 1997, where the Nigeria’s first major associated gas utilization scheme was recorded and the exports of Nigeria’s first shipload Liquefied Petroleum Gas (LPG) by Chevron from the NNPC Escravos gas project of 30th September, 1997, collectively, marked a watershed in Nigeria’s gas energy resource development. Similarly, the September 8, 2000 NNPC/Chevron joint venture initiative to convert national gas into clean petroleum fuels in order to reduce the amount of gas being flare during its operations estimated to required $2 billion investment, as well as, the July 2, 2001 NNPC/Chevron Joint Venture agreement to facilitate the extension of the Escravos Gas Project (phase 3) and the Escravos gas-to-liquids (EGLT) project collectively represent an epoch making events to the Nigeria’s gas sector develop respectively. (Source: “A Capsule History of Chevron in Nigeria”, a publication of the Chevron Nigeria Plc, year 2002).
Furthermore, the coming on stream of the Nigerian Liquefied National Gas Company Ltd. (NLNG) late 1999 in a joint venture project between the NNPC and a consortium of three multinationals namely Shell Company Nigeria; Total and Agip respectively strengthened the nation’s aspirations for gas energy development in the 21st century. In the said venture, NNPC held 49%, Shell Company Nigeria Ltd. 25.6%, Total 15% and Agip 10.4% shareholding. The train 1 and 2 costed at $3.8 billion was reported to have market Nigeria’s gas energy to Europe and the United States. Our source further disclosed that the plant later witnessed an expansion to a third train which came on stream in December 2002 that led to an increased in capacity by 50%, thereby, raising Nigeria’s share of the world LNG market to 8% respectively. This development, the Shell petroleum Development Company (SPDC) asserted led to an increase at its total gas supply to the Nigerian Liquefied National Gas (NLNG) with a total sales average of 1.171 million standard cubic feet per day (scf/d) of gas, thereby, surpassing its target of 1.100 million scf/d for the year (and the 8.2 million scf/d achieved in year 2002) respectively. (Source: Mr. Chris Kinlayson, (2004) “Message from the Chairman’s “Annual Report of the Shell Company in Nigeria, tagged 2003 People and the Environment All Report, May 2004, pages 2 & 3).
The West African Gas Pipeline (WAGP) Project Between Nigeria-Benin-Togo and Ghana
Another limestone to Nigeria’s gas energy resource development was the coming on stream the WAGP mentioned above, reported to have being signed on August 11, 1999 in Cotonon, Benin Republic, to handle the West African sub-regional gas pipeline project on behalf of Nigeria – Benin – Togo and Ghana with a consortium of six multinational oil companies. (Source: “A Capsule History and Chevron Nigeria”, (2002), Ibid. p.3). The smooth operation of this project, should serve as an eye opener to Nigeria’s capability to deliver gas energy resources at what ever stage its undertakes to do. Consequently, these profound realities of Nigeria’s regional economic based and potentials in general, and in the development of one of the most desired energy resources for technological development in Europe and the Americas, Nigeria’s gas sector should be utilized in the projection of both domestic inclined needs at home, and as a strong diplomatic instrument for regional hegemony in Africa and global respect at the community of nations in our aspiration for the United Nations Security Council Permanent seat membership contest.