Gas deal spurs African power development
Six oil and gas firms and four African countries have signed agreements for the construction of a $400m pipeline to transport Nigerian gas along the west coast of Africa. The deals pave the way for the growth of vital natural gas and power generation infrastructure in the region.
Chevron Corp. and Royal/ Dutch Shell Group signed a deal with four west African state gas firms in August to develop the 990 km (620 mile) pipeline that will transport natural gas from Nigerian fields to markets in Ghana, Togo and Benin. The project will bring an end to the flaring of natural gas from offshore oilfields.
The pipeline will take 24 months to construct. Chevron estimates that between 50 and 160m scf (4.53m m3) of gas will be transported via the pipeline.
Ghana is expected to take 75 per cent of this to supply new and existing power plants at Tano, Takoradi and Tema. Nigeria, Ghana, Togo and Benin signed a memorandum of understanding in August that gives the companies the right to develop the pipeline. All three countries have been suffering from shortages of power recently, largely due to low water levels in hydropower facilities.
First deliveries of gas are scheduled to take place in January 2002. The World Bank estimates that by using the gas, the three countries should be able to save $500m in energy costs over a 20-year period.