Nigeria: Parnership With Algeria to Commit Swelves to $12 Billion Trans Sahara Gas Pipeline Project

Nigeria and Algeria have begun talks in Abuja towards finalising the Memorandum of Understanding (MOU) on the implementation of the Trans Sahara Gas Pipeline project expected to deliver gas from Nigeria to Mediterranean and European gas market passing through Niger and Algeria.

• The Group Managing Director (GMD) of Nigeria National Petroleum Corporation (NNPC), Mr. Mohammed Barkindo and the Chief Executive Officer (CEO) of Algerian SONATRACH oil company, Mr. Mohammed Meziane met at the NNPC corporate headquarters to determine how to advance the project which Mr. Meziane disclosed had been estimated to cost $12billion.
• The NNPC GMD stated that the project was important because of the multiplier effects it would have on the Nigerian domestic gas market and for the countries and communities that would provide its right of way.
• According to him, “the project as reported in the feasibility study is a commercially viable project that has a number of multiplier effects in our various economies and our local communities that will provide the right of way of this pipeline.
• “It is a competitive project viewed against other avenues of developing and marketing gas and therefore, it offers us a unique opportunity to diversify not only sources of energy but also market for our gas in order to strengthen global inter dependence of oil producers and consumers of this very valuable resource that is gradually becoming the fuel of choice because of the environmental credential of gas and the sensitivity of climate change that now is not only felt in the consumer countries but also in our country, the developing countries of the South,” he said.
• Mr. Barkindo said that NNPC intended to participate fully in the entire chain of the project and expressed delight in the disposition of the Algerian oil company to the project noting however that finalising the MOU remained a major challenge.
• “The immediate challenge before us today is to clean up the draft MOU between our countries including Niger.
• And in order to clean up this draft document for the signatures of our three governments, it is the advice of our officials that all the commercial issues as well as the technical issues relating to this project should be assigned to the negotiation of the Joint Venture Agreement (JVA) that will govern this project as a commercial venture.
• “In other words, the MOU will be the umbrella document setting in broad terms the objectives of going into this project and possibly other areas of operating between our two countries and therefore should not be burdened with technical and commercial issues.
• “The importance of achieving the milestone of cleaning up the document and getting the MOU signed cannot be over emphasised because this would demonstrate to the international community the commitment of our governments at the highest level to pursue this project and strengthen the bilateral economic relations not only between Algeria and Nigeria but also with Niger that our two governments admitted into this project in February of last year,” he stated.
• In his contribution, the CEO of Algerian SONATRACH stressed the importance of the gas pipeline project saying since it would add value to the benefitting countries, it was necessary to quickly implement it.
• Mr. Meziane was hopeful that the meeting would produce positive results that would advance the project which he said was viable in view of the increasing demand of the European market for gas.