Nigeria is raising its ante for an Africa-Europe gas pipeline which, once completed could bridge the energy gap between the sources and consumers between the two continents.
The project though justified as one way of levelling the energy access field has faced questions on financing with reports that the chosen financier, China, was dilly-dallying on commitment.
Officials term it trans-Sahara gas pipeline, envisioned to run from Nigeria’s gas wells through the Western Sahara Desert to Morocco and onwards to Europe.
Nigeria’s Junior Petroleum Minister, Timipre Sylva, told The EastAfrican that his country is building its portion and hoped to have it extended to Senegal and onwards to Morocco and other North African countries.
“Morocco shares boundaries with Europe. So, once it gets to Morocco, we can hook up with their pipeline system and take our gas straight to Europe through pipelines,’’ he said in Abuja.
“President Muhammadu Buhari and the King of Morocco are very committed to it and we believe that we will take it to an advanced stage,’’ he added.
In Nigeria, officials say President Buhari sees the pipeline as very “dear” to him. Femi Adesina, his advisor on media and publicity said Buhari wants to see the project succeed.
“We promised the nation we will expand the critical gas infrastructure to promote the use of gas in the domestic market,” he said during the groundbreaking ceremony for pipeline known as the AKK Gas Pipeline last week.
“These projects are fundamental to our desire to industrialise and energise the entrepreneurial spirit that is ever present in our population,” Buhari said.
Ranking as one of the top 10 largest world’s gas resource countries with excess of 600 trillion cubic feet, Nigeria launched what it called the first phase of its gas pipeline project that targets the trans-Saharan and European markets.
It will construct the Ajaokuta, Kaduna, Kano gas pipeline (AKK), which is part of the West African gas pipeline that is already in place, taking gas from Nigeria to Benin Republic, Togo and Ghana. The final lap of the AKK project would extend it to the Sahel and on to Algeria, Morocco and Europe.
The AKK gas pipeline project entails the construction of a 614km natural gas line from the Ajaokuta terminal gas station in the Kogi state in the north central region of Nigeria, through the Federal Capital Territory, Niger, and Kaduna, to terminate at a gas station in Kano.
The project to cost $2.89 billion would be in three phases, under a build-and-transfer public-private partnership model. As it is, it will connect to existing pipelines in Nigeria from Obiafu in Rivers State, Escravos in Delta State and Lekki in Lagos State. Buhari sees this as a way to “enhancing national energy security, creating balanced development, and further integrating our nation.”
Mele Kyari, group managing director, NNPC, said the AKK gas pipeline project will integrate the Northern region of the country with the Niger Delta, Eastern and Western regions of the country.
But the project is facing a perception problem in Nigeria. Nigerians fear that the celebration of the project could be short lived as reports indicate that it hit financing bottlenecks in July because of the delay in obtaining the finance from China despite Nigeria’s commitment of $475 million as counterpart funding.
Some Nigerian officials have said they were still negotiating with China, even though the NNPC has said it was exploring for alternative financiers as Plan B.
Nigeria’s external debt is about 10 percent Chinese owed. It owes some $32.88 billion to external lenders, according to the debt management officer. The Exim Bank of China is owed $3.4 billion.
Cui Jianchun, Chinese ambassador to Nigeria, on July 22, rejected claims loans were exploitative, saying both countries stand to benefit.
“It is only logical that when one lends a friend or business partner money, one will also think of how to get the value of the money back,” Cui said in Abuja.
Nigerian Gas Company a subsidiary of the project facilitator, Nigeria National Petroleum Corporation, will provide equity financing worth $434 million.