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Nigeria: NNPC, Algeria Hold Talks With Shell Over Trans-Sahara Gas Project

Daily Independent (Lagos)

12 January 2009

Bassey Udo

The Nigerian National Petroleum Corporation (NNPC), on behalf of the Federal Government, at the weekend held high level discussions with their Algerian counterparts and the Netherlands to explore prospects for a partnership Shell for the development of a trans-Saharan gas pipeline project that convey natural gas from Nigerian to Europe across the Sahara. , Algerian official media reported.

Algerian Energy and Mines Minister, and immediate past President, Orgnaisation of Petroleum Exporting Countries (OPEC), Chakib Khelil, said the need for the meeting emerged after recent talks with the Dutch Economic Affairs Minister, Maria van der Hoeven.

Agency reports quoted Khelil as indicating that the two parties had raised the possibility of a partnership between Sonatrach, the Algerian national oil company, the NNPC and the Shell to develop the mega-project of the Trans Sahara Gas Pipeline linking Nigeria to Europe through Algeria.

APS did not elaborate.

The sub-Saharan project, which is said to require a capital investment in costs estimated at $10 billion for the pipeline and $3 billion for the gathering centres, would send up to 30 billion cubic metres per year of natural gas produced from Nigeria for supply to European markets through a 4,128 kilometres long (about 2,580 mile) pipeline system from Niger and Algeria. The project is expected to be completed in 2015.

European Union (EU) Energy Commissioner, Andris Piebalgs, says the project is a welcome development, as is in the interest of European energy security and the environment as well as of Africa’s development.

Consequently, Piebalgs disclosed that because of the overwhelming strategic importance of the project to help meet the world’s energy supply need, the EU may be considering facilitating the finance of the project.

The project is looking for support from European governments and gas consumers, which are concerned about falling domestic supplies and reliance on gas piped in from Russia.

Russian gas monopoly, Gazprom, said last year it was holding preliminary talks with the Federal Government about prospects for participation in the venture.

The gas would be transported across the Mediterranean through a growing network of pipelines that now takes Algeria’s gas to increasingly gas-dependent customers in Europe.

With a reserve of about 187.5triilion standard cubic feet, Nigeria ranks seventh among global gas reserves and top of the pack in Africa.

Royal Dutch Shell affiliate, Shell Petroleum Development Company (SPDC), produces the bulk of the gas on account of its control of more than 50 percent of the nation’s total oil and gas reserves.

Gazprom has in recent times indicated interest to be involved in the development of the nation’s industry.

Apart from an offer for an initial investment capital of up to $2.5 billion to secure its proposal to position itself as alternative to the already deeply invested U.S., European and Asian interests doing business in Nigeria for more than five decades.

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