Nigeria and the trans-Saharan gas pipeline

The funding of a long time proposed 48-56-inch 4,300 km multi-billion dollar Trans-Sahara Gas Pipeline (TSGP) received the attention of the National Assembly via the federal government of Nigeria's 2009 budget. The proposed TSGP involves three countries: namely; Nigeria, Niger Republic and Republic of Algeria. Thus the first phase of the proposed international pipeline network will run from Nigeria's Calabar, Cross River State, stretching through Umuahia, Enugu to Ajaokuta.
The second phase of the project will link Ajaokuta through Abuja to Kaduna and Kano while the third phase will move gas from Kano through Niger Republic to Algeria. Once it comes on stream, the pipeline will transport gas to northern Nigeria, Republic of Niger and southern Europe through the system at 18-25 bn cmpy starting from 2015. The European Union (EU) leg of the long and tedious journey will be via Algeria's Mediterranean coast at Beni Saf and subsea pipelines of 20-inch between Beni Saf and Spain.

President Umaru Musa Yar'Adua, had on December 02, 2008, proposed an appropriation of the following sums: N 903.9 mm for the Trans-Sahara Gas Pipeline, N 6.7 bn for the Calabar-Umuahia-Ajaokuta Gas Pipeline, N 10.3 bn for the Ajaokuta-Abuja-Kano pipeline and N 1.1 bn for the Gas Supply Pipeline to PHCN Delta IV in his 2009 budget presented to the National Assembly for passage. The TSGP is estimated to cost the parties to the project $ 10 bn-$ 12 bn for its design, construction and inauguration.
On January 07, 2009, the newly appointed substantive Petroleum Resources Minister, Dr Rilwanu Lukman, was at the National Assembly to parley with the members of the House of Representatives Committee on Petroleum (Upstream) to defend his ministry's 2009 budget; including the budgetary allocation made for the TSGP.

For many Nigerians, the TSGP looks a strange animal appearing from nowhere and making its debut in the country's national budget: providing a much wider public knowledge. Hence, the Minister was quick to explain to the legislators that the project had been on the drawing board for over 20 years owing to the low price of gas and the low demand for the product then.
Algeria's energy minister, Chakib Khelil and Dr Lukman at different fora had assured their respective audiences of the feasibility of the dream pipeline. They all have said that, all those previous and existing limitations had changed over time and that there is now a very high market demand for gas in Europe and also EU is looking at alternative sources away from its Russian traditional suppliers for political and strategic reasons.

Furthermore, Europe's gas production decline and environmental initiatives make the TSGP project more desirable now according to commissioned consultant's feasibility reports. Secondly, both Nigeria's and Algeria's new commitment to the pipeline are within the framework of NEPAD [the New Partnership for Africa's Development]. For example, Nigeria's Dr Lukman believes that Nigeria needs to invest in the project as it would help the country benefit maximally from her gas resources and the time to do that is now.
Therefore the TSGP is a golden opportunity for Nigeria to exploit her gas potentials and utilise its gas resources to enable her earn as much revenue from it as it is earning from oil and meets its nagging domestic gas utilization, gas-flare elimination and greenhouse gases/climate change policy requirements all at the same time -- a silver bullet for achieving a "win-win" national aspiration. For example, in Nigeria, the TSGP will facilitate building gas transportation and distribution infrastructure and super structure for moving its gas from the South to the Northern parts of the country where it is badly needed for domestic, commercial, agricultural and industrial uses.

Energy economists Paul Stevens, Emeritus Professor at the foremost University of Dundee's Centre for Energy, Petroleum, Mineral Law and Policy (CEPMLP) and Resident Senior Research Fellow (Energy Economics and Policy) at the famous British Royal Institute of International Affairs (Chatham House) in London, is of the opinion that now and in the near future, the world will need more cross-border pipelines for oil and gas. Stevens provides two factors that explain the reasons for this need:
First is that the reserves close to traditional markets are being depleted. Newer, more remote sources of oil and gas will be required. Many of these will require pipeline delivery because either they are landlocked or, in the case of gas, because liquefied natural gas (LNG) projects are less attractive than pipelines, other than for distances in excess of 3,000 km.

Second, many gas markets had been constrained by regulatory and institutional factors. In recent years these constraints have been eroded. A potential "dash for gas" furthermore is being re-enforced in many areas by a combination of gas sector reform, creating gas-to-gas competition; electricity sector reform, leading to strong demand for Combined-Cycle Gas Turbine (CCGT) generation; and concerns about the environmental damage caused by the consumption of other hydrocarbons.
Having moved from a "pipedream" conception stage, which took almost 20 years, the issues of commercial, financial and economic viabilities of the TSGP project have been assured as the main targeted consuming European market has been secured. For example, in the words of Europe's Energy Commissioner Andris Piebalgs: "The EU, however, can guarantee security of demand." Moreover, Europe expects to import 500 bn cm of gas in 2020.