Gas pipeline project to generate 1.8 billion dollars investment

Accra (Greater Accra), 28th April ?99 - The proposed West African Gas Pipeline Project (WAGP) is expected to generate some 1.8 billion dollars additional investment, create about 80,000 jobs and reduce pollution caused by flaring of gas in Nigeria.

The investments comprise 400 million dollars for the building of the pipeline, 600 million dollars for power plants and 800 million dollars in new secondary industries such as minerals processing.

The project, when completed, is expected to bring down gas emissions by 100 million tons and help save the environment, including hundreds of thousands of hectares of forests in the region.

This was contained in a paper authored by Mr Joe O. Anyigbo, Executive Director of Chevron Nigeria Limited, Chris P. Miller, WAGP Project Manager, Chevron Overseas Petroleum Incorporated, and Mr Albert H. Spiers, Vice President, Dames and Moore Group, which did a study on the project.

The study was on: "The Road to Success on the West African Gas Pipeline Project" and was presented at the "Oil and Gas Africa '99" conference and exhibition in Accra on Tuesday.

The paper said the project is an infrastructure programme that will link trillions of cubic feet of natural gas produced in Nigeria to regional power plants and industrial consumers throughout the sub-region.

"With this project, West Africa can make significant strides toward its economic growth and self-sufficiency goals, precisely the kind of progress outlined in Ghana's Vision 2020 Plan".

The regional fuel supply system will begin generating benefits as early as 2002 when gas starts flowing in through the pipeline.

The authors said the project is physically a 1,000-kilometre pipeline system that will connect gas supplies in Nigeria's Western Delta to new power plants and industries in Ghana, Benin and Togo.

Dames and Moore said their conclusions indicate that gas emissions in Nigeria will fall by 78 million tons over 20 years. In Ghana, Togo and Benin, when gas replaces crude oil in the power plants, an additional 22 million tons of greenhouse emissions will be eliminated over the same period.

They said one of the power plants that will receive Nigerian gas, the 300-megawatt facility at Takoradi, is already operational and under expansion.

"Other power plants are in an advanced stage of planning, including the 220-megawatt plant at Tema. These plants will run on crude oil until the gas arrives."

Planning for the project began four years ago when the governments of Ghana, Benin, Nigeria and Togo entered into an agreement for the supply and transmission of natural gas.

A steering committee of ministers of mines and energy of each participating country is overseeing the progress of the project through a project developer.

Six public and private sector companies have expressed interest in developing the project. They are Chevron Nigeria Limited, Ghana National Petroleum Corporation, Nigeria Gas Company and Shell Petroleum Development Company of Nigeria. The rest are Societe Beninoise de Gas S.A. and Societe Togolaise de Gas S.A.The authors of the paper said key milestones have been chalked in the last few months, which put the pipeline much closer to reality. These are the completion of the feasibility study phase of the project and the study into the economic and environmental benefits of the project in March.

The feasibility study concluded that the WAGP is commercially viable, as it would be serving a population of over 250 million. There are no significant legal or technical impediments, and it would be developed in phases to match system capacity.

The paper noted that the gas market in the region is projected to grow four to six fold over the next 20 years, as demand for electricity and natural gas fuel increases.

It said Chevron, working with the governments and consortium partners, is to initiate phase two of the project, which includes establishing licensing arrangements, conducting the necessary engineering design and comprehensive environmental studies.

The paper called for massive support of the project since it is the kind of project that builds the muscle and bone of a modern economy.

"This project offers West Africa a chance to show it is serious about attracting private investment and that it is part of this continent's answer to long-term energy independence, economic growth and environmental progress."

GRi