Resolving bottlenecks around WAGP to drive needed investment
A cursory look at the West African Gas Pipeline projects initiated in 1980 to resolve the lack of interconnectivity of gas networks in West Africa appears to be lingering on the occasion of absence of further investments.
This development according to industry close watchers may not be unconnected to the perennial issues of lack of commitment by ECOWAS members’ states to drive the needed investments
The project consists of a 678 km gas pipeline that extends from the existing Escravos-Lagos gas pipeline at the Alagbado “Tee” to a new compressor station in Ajido near Lagos Beach and from there follows the coastline some 15 km offshore to the Takoradi power plant in west Ghana. It also includes lateral connections from the offshore line to onshore gas-receiving stations at Cotonou, Lomé, and Tema.
From inception, WAGP projects was conceived to supply the West African market namely Ghana, Benin, Togo about 120 million standard cubic feet of gas (mscf) it cannot meet that figure as a result of a combination of factors such as pipeline vandalism and low gas supply.
Analysts in the energy sector while commenting on the bottlenecks around WAGP observe that Nigeria has had problems meeting its gas supply obligations repeatedly, and has been fined for it.
They also disclosed that there is the issue that if the current framework is thoroughly beneficial to Nigeria, considering that the domestic electricity sector has suffered gas supply issues, and the domestic and foreign export prices exceed the price at which other West African countries are willing to pay for gas supply. Pipeline vandalism in the Niger Delta can also not be ignored.
Ayodele Oni, an energy expert and a partner with Bloomfield law Limited giving reasons for Nigeria’s inability to meet her gas obligation said that the current gas delivery framework in Nigeria is heavily geared towards gas supply for the export, predominantly LNG, market in Europe, Asia and the Americas.
He further said that the WAGP has been hampered by many issues adding that it is important to note that the historical context has changed from the 1980, when the WAGP was first conceived, to 2007, when it was finally operational.
Industry experts observed that part of the issue is that energy policy in West Africa is more along of the lines of unilateral action by individual states, rather than the multilateral approach suggested by the institution of the WAGP (and its sister project, the West African Power Pool). As such, it can be argued that the project has failed to meet the purpose was it was set up initially.
They further opine that in consideration of the fact that the WAGP is majority owned by American and European companies, there may not be sufficient incentive on their part in making additional investment as their main focus is crude, and their gas supply focus is the European, American and Asian export market, which is more profitable.
The WAGP has the potential to turn Nigeria into a regional hub for gas supply. But that would require additional investment and collaboration between the different ECOWAS countries to put it into effect. As the country with the most to make from a successful WAGP, the onus is on Nigeria to take the steps to leverage on a potentially large energy market.
KELECHI EWUZIE