Nigeria is increasing its stake for an Africa-Europe gas pipeline which, once completed, could bridge the energy gap between sources and consumers between the two continents.
The project, although justified as a way to level the field of energy access, faced funding issues with reports that the chosen financier, China, was hesitant about its commitment.
Officials call it the Trans-Saharan Gas Pipeline, designed to run from Nigeria’s gas wells across the Western Sahara Desert to Morocco and then to Europe.
Young Nigerian Oil Minister Timipre Sylva told The EastAfrican his country is building its share and hopes to expand it to Senegal and Morocco and other countries in North Africa.
“Morocco shares borders with Europe. So once we arrive in Morocco, we can connect to their pipeline system and bring our gas directly to Europe through pipelines,” he said in Abuja. .
“President Muhammadu Buhari and the King of Morocco are very attached to it and we think we will bring it to an advanced stage,” he added.
In Nigeria, officials say President Buhari considers the pipeline very “expensive” to him. Femi Adesina, his media and advertising advisor, said Buhari wanted the project to succeed.
“We pledged to the nation that we will expand critical gas infrastructure to promote the use of gas in the domestic market,” he said at the inauguration ceremony of the pipeline known as the AKK pipeline. last week.
“These projects are fundamental in our desire to industrialize and boost the entrepreneurial spirit that is still present in our population,” said Buhari.
Ranking among the top 10 gas producing countries in the world with more than 600 trillion cubic feet, Nigeria has launched what it called the first phase of its gas pipeline project which targets trans-Saharan and European markets.
It will build the Ajaokuta, Kaduna, Kano (AKK) pipeline, which is part of the West African pipeline already in place, carrying gas from Nigeria to the Republic of Benin, Togo and Ghana. The last round of the AKK project would extend it to the Sahel and to Algeria, Morocco and Europe.
The AKK gas pipeline project includes the construction of a 614 km natural gas line from the Ajaokuta terminal gas station in Kogi state, north-central region of Nigeria, across the Territory of the federal capital, Niger and Kaduna, to end at a gas station in Kano.
The $ 2.89 billion project would take place in three phases, under a public-private construction and transfer 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 it as a way to “improve national energy security, create balanced development and further integrate our nation”.
Mele Kyari, group chief executive, NNPC, said the AKK gas pipeline project will integrate the country’s northern region with the Niger Delta, eastern and western regions of the country.
But the project faces a perception problem in Nigeria. Nigerians fear the project’s celebration will be short-lived as reports indicate it encountered funding bottlenecks in July due to delay in securing funding from China despite Nigeria’s commitment $ 475 million in matching funding.
Some Nigerian officials have said they are still negotiating with China, although the NNPC has said it is exploring alternative financiers like Plan B.
Nigeria’s external debt is around 10 percent to the Chinese. It owes some $ 32.88 billion to external lenders, according to the debt management official. Exim Bank of China owes $ 3.4 billion.
Cui Jianchun, Chinese ambassador to Nigeria, on July 22 dismissed claims that the loans were abusive, saying the two countries could benefit.
“It makes sense that when you lend money to a friend or business partner, you also think about 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.