The West Africa Gas Pipeline (WAGP), a natural gas project initiated by the Federal Government with the governments of Benin, Ghana, and Togo, has come under intense criticisms as stakeholders have said the project has not yielded the desired results.
The pipeline is designed to supply gas from the Escravos region of Niger Delta to feed generating plants of the participating countries.
The project, which was the first regional natural gas transmission system in sub-Saharan Africa, was initiated to, among others, channel away associated gas from Nigerian oil fields where gas is flared, generate employment for Nigerians and foster economic integration of the West African countries involved.
The World Bank and sponsors of the project – Shell and Chevron – had claimed that the WAGP would contribute to putting an end to gas flares in Nigeria and provide cheap energy.
However, more than 10 years after the project was embarked upon, Nigeria still flares more than 1.5 billion cubic feet of natural gas per day, which adversely affects the health of the people.
It is estimated that Nigeria loses about $2.5 billion yearly due to lack of infrastructure to harness gas.
The volume of gas flared in Nigeria is the same quantity Trinidad and Tobago utilises for both domestic and export, according to industry sources.
Industry experts told THISDAY yesterday that there had not been “anything to convince Nigerians that the project is worth continuing”, as according to them, it had neither reduced gas flares nor improved Nigeria’s trade and diplomatic relationship with the participating countries.
The agreement to supply gas to the three countries under the WAGP project, as part of commitment to the West Africa Gas Project scheme, was subject to satisfactory supply to the domestic market including the power plants.
However, while gas constraint has been a major hindrance to steady power supply in Nigeria, the Nigerian Gas Company (NGC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has continued to transport the gas that would have been utilised to feed the nation’s power plants and industrial manufacturing firms to sister countries to meet their requirements under the (WAGP) project.
It was gathered that this year alone, about 150 million standard cubic feet of gas (mmscf/d) was to be supplied to Ghana alone and this will double by next year to over 300mmscf/d to shore up the country’s power generation capability and also boost its industrial sector demand at the detriment of the Nigerian economy.
President Goodluck Jonathan had frowned on the arrangement whereby Nigeria supplies gas to other countries to boost their electricity needs, whereas there is no adequate gas for power supply in Nigeria.
“For Nigeria to be exporting gas and yet does not have this vital resource for domestic power generation is like a farmer who after a bumper harvest sells off all his or her produce, spends the proceeds on other material things and consigns the family to living in hunger. It is not and will never be a wise proposition,” Jonathan had said at a recent oil and gas conference in Abuja.
Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, recently confirmed that as much as 1.5 billion cubic feet of natural gas per day was currently being flared in Nigeria.
The World Bank estimates that gas flaring in the Niger Delta releases some 35 million tonnes of carbon dioxide annually into the air.
The delay in the execution of the WAGP project, initially estimated to cost $620 million, THISDAY learnt, pushed up the cost to about $ 1billion.
The World Bank provided a guarantee of $50 million for Ghana, while the bank’s Multilateral Investment Guarantee Agency also provided a $75 million political risk guarantee for the project.
The project, which runs both onshore and offshore, through the Republic of Benin, Togo and terminates in Ghana, was initially scheduled to flow gas from the Escravos to Egbin power station in Lagos and to some West African countries by June 2005.
Initially, the project was to have terminated in Senegal, but this was shelved owing to political instability in several countries where the pipelines would run through, notably Ivory Coast, Sierra Leone and Liberia.
These setbacks made the completion date to be shifted from November 2005 to December 2006, and later, April 2007 and then December 2008, due to militancy in the Niger Delta.
The contractors encountered initial difficulties in laying the 470mcftp/d (million cubic feet a day) pipeline due to the hard rocks in the pipeline right-of-way in Ghana.
Supply of gas to the participating countries commenced in 2008, but was suspended due to the vandalism of the Escravos pipeline.
However, in April this year, Nigeria restarted supply of 30mscfp/d of natural gas to Ghana after a one-year outage caused by pipeline vandalism and fuel quality problems.
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