Nigeria Eyes $20 Billion Trans-Saharan Oil Project To Europe

Written by Kevin Mwanza

Feb 05, 2014

Nigeria, already black Africa’s largest oil exporter, is thinking big, about exporting natural gas to Europe and thereby undercutting Brussels’ unhappy dependence on natgas exports from the Russian Federation.

According to the authoritative U.S. government’s Energy Information Administration, “Nigeria is the largest oil producer in Africa and was the world’s fourth leading exporter of liquefied natural gas in 2012. Despite the relatively large volumes it produces, Nigeria’s oil production is hampered by instability and supply disruptions, while the natural gas sector is restricted by the lack of infrastructure to monetize gas that is currently flared (burned off)… Nigeria flares the second largest amount of natural gas in the world, following Russia. Natural gas flared in Nigeria accounts for 10 percent of the total amount flared globally. Gas flaring in Nigeria has decreased in recent years, from 575 billion cubic feet in 2007 to 515 Bcf in 2011. There are a number of recently developed and upcoming natural gas projects that are focused on monetizing natural gas that is flared.”

The EIA estimate is too modest – the News Agency of Nigeria reports that Abuja is thinking big, and that the Nigerian government is backing the $20 billion Trans-Saharan project which, when completed will transport about 30 billion cubic meters of natural gas from Nigeria’s Warri region through Niger to North Africa’s Algeria northwards to Spain and Europe.

The only slight stumbling block on this grandiose scheme is cost, which is estimated at $20 billion. On 29 January Nigerian President Goodluck Jonathan announced in the Ethiopian capital Addis Ababa that Nigeria has mobilized $700 million to support the completion of the Nigeria-Algeria natural gas pipeline project. Jonathan told his audience, “We have raised $450 million in Eurobonds and an additional direct equity contribution of about $250 million in support of this project. The Nigerian National Petroleum Corp., which is the executor of this project has completed the concept design for the pipeline, which is an important milestone since I last provided an update on this project to the committee.”