28-09-08 When the memorandum of understanding for the West African Gas Pipeline (WAGP) was signed in 1999, the plan was to utilise some of the gas flared in Nigeria to help generate an estimated 3,000 MW of electricity using thermal power stations in Ghana, Togo and Benin.
For a sub region that has one of the lowest generation capacities in the world, with less than 60 % of the populace connected to the epileptic grids, the various governments were under pressure to find solutions to their economies biggest woes.

Although the West African sub region has substantial hydro resources used for the generation of power, comparative cost analysis indicates that gas-fired thermal plants are the most cost effective for the countries. And with Nigeria having a proven reserve of 185 tcf of gas and an average of 1.2 tn cf of gas being flared annually within its borders, (a quantity that could generate over 12,000 MW of electricity), WAGP seemed a win-win deal as some of the gas could be collected and utilised bythese countries, while the participating oil companies and Nigeria will gain revenue.
Certain of its economic viability, Shell Overseas Holdings had no problems taking up 18 % of the project while Chevron West Africa Gas Pipeline held 36. 7 %. The Nigerian National Petroleum Corporation took a 25 % stake, Takoradi Company Power Ghana took up 16. 3 % while Bengaz (Benin Republic) and Sotogaz (Togo) took up 2 % each.

But almost 10 years down the lane and with no gas introduced in the pipeline, expectations by the participating countries have begun to turn into frustrations. The frustrations almost boiled over recently at a two day workshop on commercial framework for energy investment in Accra.
Although the participants set out to examine the entire energy set up in the West African sub region, the logjam associated with WAGP unwittingly took centre stage for almost the entire duration of the workshop. Participants from Ghana, Togo and Benin suggested that Nigeria could be delaying the supply of gas so as to concentrate the available gas towards meeting its own power needs. They reasoned that since Nigeria was currently groaning under inadequate power supply and efforts were being made to intensify gas supply for the existing thermal stations, new plants constructed under the National Integrated Power Projects as well as the independent power stations, it will be difficult to get Nigeria to allow the diversion of gas to WAGP.

As a matter of fact, the Nigerian government had in April 2008 approved the Domestic Gas Supply obligation policy, which allocated oil companies operating in the country with specific quantities of gas which they must make available to the domestic market, for power generation. Worried by the companies' poor response after five months, the Minister of State Energy in-charge of Gas, Mr Emmanuel Odusina, warned that if there was no evidence of cooperation by the end of October, the Nigerian government will impose heavy sanctions, which would include suspending all LNG projects targeting export of gas.
Without doubt, the worries of Ghana, Togo and Benin Republic are spot on. A member of the Ghanaian House of Parliament, Hon. Amad Sorogho, told that the deadline for the supply of gas was fixed for early 2008, but it had been extended repeatedly. He wondered if gas would ever be delivered under the project.

He explained that Ghana needed gas to run its 550 MW thermal station built at Takoradi and another thermal power station planned at Tema, which is also dependent on gas expected to come from WAGP. At present, Ghana depends on its 912 MW hydro power station at Akosombo and another 160 MW hydro plant at Kpong.
Generation from the plants provide the citizenry, especially those in the urban areas with fairly stable power supply especially in the rainy season when the dams are high. However, the citizens want their energy security guaranteed, and are pushing their government to provide all-year-round stability in power supply.

Ghanaians have also been told that power generation from thermal sources was the cheapest and were assured by government officials that when gas from WAGP was delivered in 2008, it would improve their power situation to a perfect state with lower charges. As the Chief Operating Officer, West African Gas Pipeline Authority, Mr Magbonde Leonce tried to explain the undue delay of the project, it cut no ice among the Ghanaians, Togolese and Beninese. They also doubted his promise that gas would be introduced to the pipeline in October.
According to Leonce, the WAGP onshore pipeline running from Lagos to Takoradi Ghana had been completed, but the free flow gas delivery was being delayed by the impurities found in the mixture of gas supplied to WAGP by Shell and Chevron. He added that it was the supply by Shell from its Otorogu plant that was wet, with a high a level of water and other impurities as compared to the dry gas provided by Chevron from its Escravos plant, which was the required specification for WAGP.

He said, "When we first mixed the gas from Chevron and Shell, we got 25 psi per Btu. Shell has been working on a facility to improve the quality of its gas and that greatly reduced the impurity level. When we tested the mixture again at Itoki, it was good enough for WAGP. But when it was passed through the Escravos Pipeline, the impurity level increased to 11 psi per mm Btu."
The chief executive officer stressed that there was a need to pig the pipeline so as to reduce the impurity level, adding that the process was being handled by the Nigerian Gas Company and would run until the end of September. He explained that when the pigging was completed and the specification met, the introduction of gas to the WAGP would begin and the Takoradi facility could start receiving gas from October.

Leonce also explained that the West African Gas Pipeline Authority recently contracted two firms, DBN and Zakeem respectively to complete the compressor of WAGP and the outstanding onshore pipeline running across Benin, Togo and Ghana. According to him, DBN and Zakeem were hired after Willbros the original contractor abandoned the compressor project in January 2008 after asking for unreasonable funds without delivering commensurate work. He explained that the completion of the compressor was important to the delivery of gas via the WAGP.
He said, "To deliver gas, we need to construct a compressor station in Lagos. The pipeline is ready, but the compressor is not. The free flow of gas does not need a compressor. The pressure of the EPC is 40 bars and can allow for the delivery of about 30 mm cfpd to Takoradi. But when the compressor is completed, it will be possible to deliver 130 mm cf to Ghana, Benin and Togo in the first instance and 474 mm cf later."

Obviously not satisfied with Leonce's explanations, a Director of the Kumasi Institute of Technology and Environment stressed the need for all parties to the WAGP project to respect the terms of the project. He also canvassed for the imposition of penalties on the oil companies, Shell and Chevron, who gave commitment that they would make the gas available when WAGP was conceptualised but has so far failed.
Edjekumhehe also wondered what would become of the thermal plants and other investments already made by the Ghanaian government in expectation that the gas will be delivered from WAGP.

Responding, Leonce said WAGP would consider reviewing the agreements it entered with parties to the project so as to introduce penalties for defaults in deadlines.
He said, "We have a five years contract, which is about expiring. We are looking at reviewing some of the provisions, especially as regards non compliance. The absence of penalties is the reason for the delay of the deadlines. This applies to countries, companies. If you do not comply, you will face sanctions."

It goes without saying that Nigeria should first meet its domestic needs before allowing the diversion of gas to the West African Gas Pipeline.
Until then, WAGP and the hope of power sufficiency by the participating countries might well remain in suspension.