July 14, 2024
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OIL & GAS RENEWABLE ENERGY

Nigeria’s Trans-Saharan Gas Pipeline Faces Hurdles

Nigeria’s Trans-Saharan gas pipeline project, aimed at exporting gas to Europe, faces significant challenges due to regional instability and domestic infrastructure issues. The $13 billion, 4,128 km pipeline, connecting southern Nigeria to Algeria’s Hassi R’Mel gas hub, is in jeopardy.

Regional instability, including a military coup in Niger, poses a major threat to the project. The coup led Nigeria-led ECOWAS to consider troop deployment. At the same time, domestic infrastructure problems, particularly with the AKK pipeline, have raised doubts about the project’s feasibility.

The Trans-Saharan pipeline, designed to carry 30 billion cubic meters of gas daily, has been in planning since 2002, aligning with Nigeria’s “decade of gas” declaration. However, the recent crisis in Niger and dependency on the delayed AKK pipeline have complicated matters.

LEADERSHIP reported that, security concerns in Niger and neighboring regions are a substantial risk, both during construction and afterward. The Niger crisis remains unresolved, with ECOWAS imposing sanctions, including freezing assets and stopping business activity.

Much of the pipeline’s $13 billion budget will be spent in Niger, which has minimal oil and gas production but significant untapped gas reserves. The project could help Niger monetize its gas resources and combat the illicit fuel trade.

Algeria’s active involvement in mediating the Niger crisis reflects its interest in ensuring the pipeline’s development, considering its own investments and gas export goals.

While questions linger over the Nigerien part of the project, Nigeria has faced challenges on its end. The AKK gas pipeline’s construction stalled due to a lack of financing after Chinese banks withdrew their support. The Nigerian National Petroleum Company Limited is now financing the project.

Despite being 70 percent complete, the AKK pipeline, originally slated for completion in 2022, could remain unfinished for years.

Nigeria has made its substantial natural gas resources a cornerstone of its energy policy, but limited export infrastructure has hindered its ability to meet surging European demand following Russia’s Ukraine invasion.

Algeria currently supplies pipeline gas and LNG to Europe, potentially requiring new infrastructure if the Trans-Saharan pipeline proceeds.

The project faces competition from the Trans Africa pipeline, an even more ambitious endeavor spanning 13 West African countries from Nigeria to Morocco. However, it remains distant despite recent progress with a memorandum of understanding between Nigeria and Morocco.

Experts suggest Nigeria may be better served by focusing on expanding LNG production and exports instead of relying solely on vast transnational pipeline projects like the Trans-Saharan gas pipeline.

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