State-controlled Nigerian National Petroleum Corporation (NNPC) has embarked on another ambitious international gas pipeline project that will take gas from Nigeria, through some West African countries to Morocco in North Africa. But the success of this project may be doubtful given the poor performance of a similar project, the West Africa Gas Pipeline (WAGP).
The Nigeria-Morocco Gas Pipeline (NMGP), which was mentioned by Mele Kyari, group managing director of the NNPC at a recent meeting, this August, with representatives of Morocco National Office for Hydrocarbons and Mines and executives of International Oil Companies operating in Nigeria is a sequel to an earlier meeting between President Muhammadu Buhari of Nigeria and King Hassan VI of Morocco on a Pipeline Cooperation Agreement (PCA).
“We have a lot of stranded gas particularly in the deep-water that we need to put on the table. This project will enable us to have more gas for domestic consumption so that we can improve power supply and gas power to industry,” Kyari said.
However, this project draws attention to the abysmal performance of the West Africa Gas Pipeline Project, which has consistently performed below half its capacity. In the spirit of Economic Community of West African States (ECOWAS), four West African countries, Benin, Ghana, Nigeria and Togo in February 2000, signed an Inter-Governmental Agreement to build a gas pipeline, which will supply Nigerian natural gas on West African markets. This has not been happening.
Last month, the Republic of Benin seeking to reverse a 750-megawatt shortfall and plans to build two Independent Power Producers (IPPs), one of which is being developed by Enterprise Power, backed by the African Infrastructure Investment Managers (AIIM) and wants to use liquefied natural gas regasification to ensure supply reliability.
An independent power producer (IPP) or non-utility generator (NUG) is an entity, which is not a public utility, but which owns facilities to generate electric power for sale to utilities and end-users. NUGs may be privately held facilities, corporations, cooperatives such as rural solar or wind energy producers, and non-energy industrial concerns capable of feeding excess energy into the system.
Enterprise Power is a Seychelles-registered energy infrastructure developer run by founder and partner Nikolai Germann, who has worked on tank farms, oil jetties, pipeline networks and even bio-energy power initiatives with Addax and Oryx in Benin, Ivory Coast, Ghana, and Sierra Leone.
The WAGP was designed to pump 474 million cubic feet per day via a 20-inch diameter pipe with full compression but has never supplied even half of the contracted volumes, averaging less than 100 million cubic feet per day with throughput boosted only when Nigerian Independent Power Producers fail to pay producers that then switch gas for export if they can.
Twelve months ago, Ghana signed a 12-year deal with Russia’s Gazprom for liquefied natural gas (LNG) supply boycotting the WASP and its inefficiencies.
“The gas that will come from Russia to Ghana’s regasification plant will cost $12 per standard cubic feet (SCF). I can put gas at $3 per SCF into the West African Gas Pipeline if it was efficiently managed and with an extra cost of $2 per SCF for transportation cost I can deliver gas to Ghana at $5 per Scf less than half of what the Russian gas will cost” said Austin Avuru, chief executive officer of Seplat, an independent indigenous Nigerian oil and gas exploration and production company in an earlier BusinessDay’s report.
