EU GOES TO NIGERIA FOR NATURAL GAS

Since the 1970s, successive Nigerian governments have always harboured ambitions of supplying gas to Europe via an onshore-offshore pipeline running from Warri city in Midwestern Nigeria through Niger Republic and Algeria to Spain and Italy. This ambitious project was known as Trans-Saharan gas Pipeline (TSGP) or The Nigeria-Algeria (NIGAL) Pipeline project.

To set the ball rolling, In 2002, the Nigerian National Petroleum Corporation (NNPC) and Sonatrach of Algeria signed the Memorandum of Understanding for preparations of the project. Feasibility studies was successfully completed on the viability of the project was completed in 2006. In 2009, Nigeria, Niger Republic and Algeria signed a further Memorandum of Understanding (MOU). According to the MOU, a Nigerian gas pipeline, passing through the territory of Niger Republic, would enter Algeria and interconnect with four existing pipelines that already supply Algerian gas to Spain and Italy.

However, the EU (and its predecessor the EEC) had always been lukewarm about the idea of boosting the volume of gas coming to Europe from Africa by combining Nigerian and Algerian gas. It was always far easier to get the gas from the USSR and later on, Russian Federation.

But, with European Union leaders shooting themselves in the foot and lungs, there is now a renewed interested in the Nigeria-Algeria (NIGAL) Pipeline project, which have been beset by many problems.

One such problem is insufficient investment in the $25 billion project due to lack of interest from Europe (until recently). Another problem is Islamist terrorism along the Sahel route of the pipeline. In 2013, Al-Qaida terrorists led by Algerian Islamist, Mokhtar Belmokhtar raided a Algerian natural gas plant and took 800 workers hostage, including more than a hundred foreigners. Many were killed in the ensuing rescue operation conducted by Algerian security forces.

With renewed interest from EU officials, there is talk about jump-starting this dormant pipeline project. (By the way, parts of the required Nigerian gas pipeline already exist.)

In the meantime, Nigeria supplies around 14 percent of the total liquefied natural gas (LNG) imported by the European Union. An EU delegation led by Matthew Baldwin (who is surprisingly British) visited Nigeria recently. While there, Mr. Baldwin told local journalists that the EU wants the Nigerian LNG supply to double to 28 percent.

A lot of promises where made by Nigerian government officials, but the fact remains that Nigerian liquefied gas infrastructure--as things currently stand-- does not have the capacity to boost LNG exports beyond the current 14 percent supplied to the EU. In fact, it is even a miracle that the country is even able to export that much given the decrepit state of infrastructure.

But, with renewed interest, and more investment, Nigeria can boost LNG exports to the EU. Of course, it goes without saying, that Nigerian liquefied natural gas can never ever be a substitute for Russian pipeline gas. Even if the Trans-Saharan Gas Pipeline is built, the combined Nigerian-Algerian pipeline gas will still not be able to rival Russian gas in terms of volume.

Above, left-hand picture shows the route to be taken by the Trans Saharan (Nigeria-Algeria) Gas Pipeline if it is ever completed. Right-hand photograph shows Matthew Baldwin, the British deputy director-general of EU Commission’s Energy Department, being interviewed by Nigerian journalists near an oil field

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