Sahara pipeline plan to feed west African gas to Europe

The project, expected to cost at least $13bn, could make gas that is currently wasted available for export.

A woman carries tapioca seeds next to a gas flare fire in Nigeria.

Nigeria, Algeria and Niger have signed an agreement to build a pipeline across the Sahara that would link Europe to big west African gas reserves. The Trans-Sahara Pipeline project, which would cost at least US$10 billion (Dh37.7bn) for the pipeline and another $3bn for gas-gathering centres, could make up to 3 billion cubic feet per day of new gas supplies available to Europe while providing an outlet for African gas that is currently wasted.

The landmark development, which could be in service between by 2015, would send Nigerian gas more than 4,000km across the desert through Niger to Algeria, which already exports gas to Europe through two pipelines under the Mediterranean to Spain. "We have the expertise and I don't think there is a problem with finance in this project," the Algerian energy minister, Chakib Khelil, said yesterday at a ceremony in Abuja, the Nigerian capital.

"I don't think there is a problem with a market. The market is there," he added. The pipeline had been planned for years, but now seems set to move ahead as the EU widens its search for new energy supplies to lessen its dependence on Russian gas. The 27-member bloc has pledged political and economic support for the project. Algeria, the biggest North African gas supplier to Europe, is aiming to raise its own gas exports by about 50 per cent to nearly 9 billion cu ft per day over the next five years. But it would also welcome a role as a gas transit country for west African supplies. It is building an undersea pipeline link to Italy to help accommodate additional flows to Europe.

The Abuja signing ceremony closely followed last month's visit to Nigeria by the Russian president, Dimitri Medvedev, during which the Nigerian National Petroleum Corporation (NNPC) and Gazprom, the Russian state-controlled gas monopoly, agreed to set up a joint venture to invest $2.5bn in Nigerian oil, gas and electricity projects. Those would include building the first stage of the Trans-Sahara pipeline.

France's Total and the Anglo-Dutch group Royal Dutch Shell have also expressed interest in helping NNPC and Sonatrach, the Algerian state oil and gas company, to develop the pipeline. The European firms' involvement would make the Trans-Sahara project more palatable to the EU, which is wary of dealing with Gazprom, after the Russian company shut off gas supplies to Europe through Ukraine in January.

Nigeria's gas reserves of roughly 184 trillion cu ft are the world's seventh largest, and the country is already the biggest sub-Saharan African exporter of liquefied natural gas (LNG). But much of the gas it pumps from oilfields goes to waste, owing to a lack of gas-gathering, processing and transport infrastructure. Instead, about 2.5 billion cu ft per day is burnt in a process called "flaring" that emits carbon dioxide and atmospheric pollutants that harm public health.

That compares with commercial Nigerian gas production of about 3.4 billion cu ft per day. As part of a "gas master plan", Nigeria has invited foreign companies to help it build gas-gathering plants, pipelines and gas-fired power stations in a drive to waste less gas while tackling its chronic domestic power shortage. Last month Russian officials said Gazprom would help NNPC end flaring. The Nigerian oil company also has an agreement with Abu Dhabi's Masdar to pursue projects to reduce carbon emissions from Nigeria's oil and gas sector. Those would largely target flaring.

On Thursday, Nigeria's senate approved a bill to increase the penalties for gas flaring, which the government technically outlawed in 1979. [e-mail]