The shareholders of a large west African natural gas pipeline project signed a $500-million deal on Monday that should see it operational by 2005, the firm’s chairman said.
The West African Pipeline Company will transport natural gas from fields in southern Nigeria and the Gulf of Guinea to the Nigerian city of Lagos and along the west African coast to Ghana, Togo and Benin.
”This is the end of a process that started about 10 years ago,” said company chairman Jackson Gaius-Obaseki.
Initially, the firm’s shareholders will be US energy giant ChevronTexaco with 41%, the Nigerian national Petroleum Corporation with 25, the Anglo-Dutch major Shell on 18 and Ghana’s Tokoradi Power with 16%.
Later Togolese and Beninois investors are expected to come on board.
”I expect that by the end of the first quarter of next year, we should be taking a final investment decision,” Gaius-Obsaseki said.
The pipeline will carry 450-million cubic feet of gas per day, and could serve as an important motor for development in a poverty-stricken and energy hungry region, analysts said.
Ghana will be the first country outside Nigeria to benefit when supplies begin in 2005, the chairman said.
The pipeline will run for 1 033 kilometres from the Niger Delta to Effasu in Ghana, travelling overland from ChevronTexaco’s Escravos oil terminal to Lagos, before being routed offshore under the Atlantic.
A study by ChevronTexaco found that the project could itself create between 10 000 and 20 000 jobs and that up to 60 000 more jobs could be created as the new power supply feeds industrial growth.
In addition to the $500-million brought to the table by the core investors, industries are expected to spend more than a billion dollars on related projects, according to the US Energy Information Administration.
The World Bank estimates that Benin, Togo and Ghana could save nearly $500-million over 20 years gas from the pipeline is substituted for more expensive fuels in power generation.
Developing the gas sector could also have a positive effect on the environment in the Niger Delta, analysts said. Currently much natural gas — a by-product of the oil industry — is flared off, polluting the air.
But some campaigners believe that the pipeline itself could damage the environment and some groups have raised concern for the fate of 50 000 families they fear will be displaced by the pipeline’s construction. – Sapa-AFP