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Market uncertainties delay Trans-Saharan gas pipeline project

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The Trans-Saharan gas pipeline project is likely to be further delayed following prevailing uncertainties in the gas market.

The project, which is a sub-regional initiative, is still on the drawing board, according to the Group Managing Director, Nigerian National Petroleum Corporation, Mr. Andrew Yakubu.

He said this on Tuesday during the Nigeria Oil and Gas conference in Abuja, adding that there were other issues surrounding the development of the project, but would not give details.

The pipeline project will transport natural gas from Nigeria to Europe through Algeria and commenced in 2002 when Nigeria and Algeria signed a Memorandum of Understanding to send up to 30 billion cubic feet per year of gas to Europe via Niger Republic and Algeria from 2015.

“The Memorandum of Understanding between Nigeria and Algeria has been signed; a feasibility study for the project has been concluded and the process of laying pipes from Calabar through Kano is about to begin,” the NNPC had recently said.

The project’s cost is estimated at $10bn for the pipeline and $3bn for the gas-gathering centres.

Russia’s Gazprom said last year that it was holding preliminary talks with Nigeria about participating in the project, but the talks had not progressed since then.

“It (delay) has to do with the market because gas project is market-driven. This has to be put in the right perspective to enable it move. Usually, when you are developing a project, there is the need to look around the investment environment,” Yakubu said.

Commenting on the country’s gas agenda, the NNPC GMD said there was a special focus on production volume and power generation.

According to him, the government has aggressive agenda for gas so as to generate 40,000 megawatts of electricity.

“That plan will be powered 78 per cent by gas. This means that more focus will be placed on gas development. The focus of the Presidential Task Force on Gas will attract potential investment in the country,” he said.

On the delay in signing of the Final Investment Decision on major gas projects in the country, he said in as much as Nigeria was poised to catch up with the rest of the world in the global gas market, there was the need to develop the domestic LNG market.


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