• Saturday, May 25, 2024
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TSGP: A tall dream becomes a reality? (II)



The agreement also gave birth to a new international energy business entity named ‘Nigaz Energy Limited’; a 50-50 parity joint venture (JV) firm formed between Nigeria’s state-owned NNPC and Russian Gas giant Gazprom is envisaged to play a prominent role in developing the proposed trans-Saharan African gas pipeline (TSGP). For example, according to industry sources, Nigaz Energy Limited/Gazprom will invest in building a 360-kilometre gas pipeline running from south of Nigeria to the north of the country at a cost estimated between US$400 million and US$500 million.
Before we start celebrating these major milestones, we need to also understand that there are major challenges that should be overcome before these milestones start to bear streams of dividends in the long term. For example, apart from establishing the appropriate commercial, fiscal, legal and technical options for the final investment decision to take place as alluded earlier by Dr. Rilwanu Lukman, Nigeria’s petroleum minister, domestication of Nigeria’s pioneer Gas Master Plan (GMP), the Niger delta security situation and developing national and regional socio-economic frameworks for the proposed project(s) should occupy uppermost priority position in President Yar Adua’s administration in the coming years; ahead of the 2015 delivery date for the first gas through the TSGP.

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At the moment, it seems so far, so good. But there are great challenges ahead as Nigeria is a novice when it comes to international gas development and trade; even with our accomplished ambitious but corruption marred Nigeria Liquefied Natural Gas (NLNG), the recently completed but troubled West African Gas Pipeline (WAGP) and as well as the gas supply agreement to Equatorial Guinea nascent experiences. In conclusion, the available Nigerian gas reserves therefore need to be carefully assessed, taking into consideration not only the current and future LNG needs, but also the West African Gas Pipeline supply needs and local gas demand.