West Africa Gas Pipe Adapts Tariffs, Urges Expansion
The West African Gas Pipeline has said it is adopting new entry and exit pipeline tariffs by end-2018.
But talk of expansion to Cote d'Ivoire, advocated by Nigerian state Nigerian National Petroleum Corporation (NNPC), remains clouded in uncertainty.
WAGP general manager for operations, Austine Ebekozien, told the Nigeria Gas Summit conference in Lagos September 27 that proposed new entry points are Takoradi and Tema in Ghana, plus the Lagos Beach Compression Station (LBCS), while the proposed exit points are LBCS and Itoki, both in Nigeria. The private gas transmission operator transports natural gas from producers in Nigeria to consumer markets in Benin, Togo, and Ghana.
Ebekozien said that WAGP has the potential to extend beyond Ghana, alluding to expected incremental gas production offshore Ghana (the Eni-run OCTP oil and associated gas field) and at Nigeria's Aje field. He called on investors, saying that there is need to transition to a bi-directional pipeline system to increase capacity to 1bn ft3/d and to accommodate new entry points, with multiple gas sources.
WAGP's website says that the Escravos-Lagos section of its pipeline, inside Nigeria, has a capacity of 0.8bn ft3/d, and that the overall WAPC system will initially carry a volume of 0.17mn ft3/d and peak over time to a capacity of 0.46bn ft3/d. However actual flows have often lagged its capacity, because of disruption to Nigerian gas production or because not enough is available for export.
Nigerian state NNPC said August 2 that the 678-km WAGP would be extended westwards from Ghana to Cote d’Ivoire, but it's unclear if its proposal has support from other significant WAGP shareholders such as Shell and Chevron. UK consultancy Penspen was contracted mid-2015 to undertake a feasibility study into WAGP's possible extension westwards by the Economic Community of West African States (Ecowas); the confidential conclusion was submitted to Ecowas on schedule last year.
New suppliers needed, before WAGP expansion viable
New suppliers close to Nigeria's Escravos Lagos Pipeline System however will remain key to justifying any expansion of WAGP. But attracting considerable investment may prove to be a challenge because there are policy inconsistencies across the sector, especially in Nigeria. This deters prospective investors, says DeltaAfrik Engineering chief operations officer James Lyons.
Nigerian independent producer Frontier Oil CEO Thomas Dada said the country's gas sector was in need of the right fiscal policy that enables prospective investors put their money into the establishment of thermal plants and get their money back and out in the currency which they invested it in.
Dada explained further that there must be sanctity of contracts on the part of the government for prospective investors to take up any real interest in Nigeria’s gas sector.