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06.06.2000 General News

West Africa Gas Pipeline likely to be on and offshore

By Reuters
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EDINBURGH, June 6 (Reuters) - The proposed $400 million West African Gas Pipeline (WAGP) is likely to be routed both on and offshore from Nigeria to its western neighbours with the final investment decision expected this October, a senior Ghana energy official said on Tuesday.

``The hybrid option is the one I believe the consortium (developing the pipeline) currently favour,'' Tsatsu Tsikata, the chief executive of Ghana National Petroleum Corp., told Reuters at the sidelines of an energy conference in Edinburgh.

If the consortium, comprised of Royal Dutch/Shell (quote from Yahoo! UK & Ireland: SHEL.L), Chevron Corp. (NYSE:CHV - news) and the state-owned oil companies of Ghana, Togo, Nigeria and Benin, agree on the on/offshore route option, the gas will travel overland from Escravos to Lagos via an existing pipeline before going offshore and finishing in Ghana.

``The onshore route option was seen to be the most expensive, while there appears to be little differential between going completely offshore and the hybrid,'' Tsikata said.

A price differential might become more apparent following the completion of current feasibilty studies.

He said the 600 km or so pipeline, which he expected to be complete by early 2003, will transform the energy opportunities in the region once the estimated 150 million standard cubic feet per day of gas starts flowing from Nigeria.

``It is a pioneering example of a project that can transform energy sectors,'' he said.

The GNPC chief said the arrival of abundant gas in Ghana, Benin and Togo could lead to the development of a regional power pool.

``With this gas we can produce electricity, that opens up the opportunity of to increases electricity exports to Burkina Faso and in time to Mali,'' he said.

The arrival of plentiful electricity in Ghana itself would also be a stimulus to economic growth, he added.

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