Trans-Sahara Gas pipeline

Engineering , Procurement , Construction and Commissioning of the pipeline that would transport about 20 Bcm /year through a 48” x 4400 Km pipeline traversing Nigeria, Niger and Algeria.

DESCRIPTION

The Trans Sahara Gas Pipeline (TSGP) is a main gas transmission pipeline from Calabar in Nigeria to Beni Saf in Algeria. The dimension is 48” with a design pressure of 100 barg, which gives an overall transport capacity of 20 bcm/year (60mcm/day). The overall length of the pipeline is ca 4400 km, of which 1037 km in Nigeria, 841 km in Niger, 2303 km in Algeria and 220km Subsea from Algeria to Spain.  

The pipeline route follows the route of the Trans-Nigerian pipeline from Calabar to Kano in Nigeria. It is expected that the pipeline will be connected to the Nigerian gas transmission system. In Niger, it is expected that there will be off-take points in the south for power production plants and in the north close to the mines for power production and potentially for direct use in the vehicles and machines used in the mining activities, where gas could replace oil. In Algeria, the pipeline follows the Trans-Saharan highway to Hassi R´Mel, where the pipeline will be connected to the northern part of the integrated gas transmission system. From Hassi R´Mel, the pipeline will follow a number of existing pipelines to Beni Saf. The middle part of the Algerian section will run in the same horizontal level as pipelines from In Salah and In Armenas. More than half of the pipeline section is hence to be constructed in well-known terrain and conditions in respectively Nigeria and Algeria. Only the middle section, from Kano in Nigeria to the south of Algeria, via Niger, is to be considered as new terrain for large diameter pipeline construction. Finally a 220km subsea pipeline would be constructed from Beni saf in Algeria to Spain in order to supply gas to the European market.

OBJECTIVES AND RATIONALE

PROJECT RISKS

PROJECT ECONOMICS

• NET PRESENT VALUE: 5500.00

• COST BENEFIT RATIO: 0.00

• FINANCIAL INTERNAL RATE OF RETURN (FIRR): 14.00

• ECONOMIC INTERNAL RATE OF RETURN (EIRR): 0.00

• COMMENTS ON ECONOMICS: • The pipeline facilitates saved costs of up to 2 BUSD per year in pure transportation to Europe. Corresponding to a PV of 25 BUSD over a 30 year period. Thus the value of the Nigerian resources is maximized by usage of pipeline transport • The pipeline would facilitate an increased utilization of Algerian infrastructure postponing potential decommissioning. Benefit have not been quantified but assumed to be high due to a high value of extending t economic life time of the assets • Europe will benefit from increased security of supply. The benefits are not quantified but would consist of better ability to diversify security of supply tools and foregone investments in the alternative fuel storages, such as fuel oil and gas oil. • No sale of gas to the local markets from the TSGP is assumed in the financial analysis; however the pipeline could pave the way for additional investments facilitating supply to industries along the route • Benefits from local usage of gas primarily lie in the power sector where generation costs could be lowered, with up to 1.3 USc/kwh by usage of gas instead of coal. PV of the benefits is in the range of 3-4 BUSD in Nigeria alone • Significant environmental benefits from local usage of gas could be obtained in saved CO2 emissions. • Economic benefits from local usage gas are mainly concentrated in Nigeria and Niger as Algeria is already using gas in many industries. • Examples of usage of gas now or in the future were made showing that the benefit of postponing production is lower than the benefit of using the resources now.

PROJECT FINANCING

OPERATION AND MAINTENANCE

OVERALL COST: 133.00

ANNUAL COST: 0.00

COMMENTS ON FINANCE:

All payments made by contribution from participation Nation (Nigeria and Algeria)

All payments made by contribution from participation Nation (Nigeria, Niger and Algeria). Niger was admitted in 2009.

All payments made by contribution from participation Nation (Nigeria, Niger and Algeria). Niger was admitted in 2009 as co-sponsor

Administrative cost is being covered by individual sponsors for their representatives attending meetings and workshops

STUDIES

PROJECT STAKEHOLDERS

Continental Coordinator

African Union Development Agency

Lead National Agency

Algeria - Societe Nationale de Transport et de Traitement des Hydrocarbures

Participating REC

Arab Maghreb Union

Lead National Agency

Cameroon - Societe Nigerienne des Hydrocarbures

Regional Coordinator

Economic Community of West African States

Sectoral Organisation

Nigeria - Ministry of Petroleum Resources

Lead National Agency

Nigerian National Petroleum Corporation

Continental Coordinator

South Africa - Department of Planning Monitoring and Evaluation

CONTACTS

Al-Amin M. Musa-Al-amin.musa@nnpcgroup.com

Mohammed S. Dahiru-Mohammed.dahiru@nnpcgroup.com

Kayode J. Ijaola-Kayode.ijaola@nnpcgroup.com

Mr. Peter Ofori-Asumadu -poasumadu@yahoo.com

Mr. Hanief Ebrahim-hanief@presidency-dpme.gov.za

CONTRIBUTION TO 2030 AGENDA