Accra (Greater Accra) 23 Feb. 2000
Nigeria has re-affirmed its commitment to the implementation of the West African Gas Pipeline project, and urged other countries in the sub-regional agreement to explore new ways of overcoming current impediments.
It also called for flexibility to accommodate the diverse requirements of member states.
Dr Rilwanu Lukman, Presidential Advisor for Petroleum and Energy of Nigeria made these comments when he and Mines and Energy Ministers from Ghana, Togo and Benin signed the Inter-Governmental Agreement (IGA) establishing the framework for the project in Abuja.
The IGA sets out the fiscal and legal framework for the construction and operation of the West African Gas Pipeline across the four countries.
The Project began in the early 1990's.
A statement by the Ministry of Mines and Energy in Accra on Tuesday, said the signing is in line with ECOWAS' two-track approach initiated at the 22 Ordinary Summit of Head of States and Governments of the organisation.
It is to work out modalities for co-operation between the two countries to accelerate the implementation of ECOWAS integration programmes.
The statement said following the IGA, a concession agreement will be entered into between the four governments on one hand and the consortium of companies that is developing the project.
The IGA, will among other things, set out mutual obligations with regard to granting to the consortium the right to develop the pipeline in a rapid manner and on a commercial basis, setting out a uniform legal framework for the construction, ownership and operation.
The Steering Committee chaired by Dr John Abu, Minister of Mines and Energy, before the signing, heard a presentation by a consortium of six companies, which
have been mandated by the developer, namely the Nigerian National Petroleum Corporation, So-Be Gaz, So-To Gaz, Ghana National Petroleum Corporation, Shell and Chevron.
Dr Abu said it marked a significant milestone in the progress of a project, which will have a tremendous impact on regional energy security and significantly reduce energy costs for the peoples of the sub-region.
A communique issued at the end of the signing reiterated the commitment of the respective governments to co-operate fully in efforts at developing strategies to promote the use of gas by industry, households and cottage industries and for electricity generation.
The statement said the ministers all expressed satisfaction at the strides being made towards the realisation of the pipeline project as one of the first major public-private partnerships for energy infrastructure development in ECOWAS.
The following is how far the project has come:
1992 - Conceptual studies undertaken by Bawie Cumess, a consulting firm, funded by the Italian government, concluded that a sub-regional pipeline to move Nigerian gas to growing markets in Ghana is feasible.
1995 - the governments of Nigeria, Benin, Togo and Ghana executed the Heads of Agreement (HOA) broadly agreeing to the establishment of the pipeline and outlining principles under which the pipeline project would be developed.
1998 - Chevron, GNPC, NNPC, Shell decided to form a consortium to develop the project. The two gas companies of Benin and Togo joined later.
1998 - In accordance with the HOA, the commercial group hired an independent consultant, Pipeline Engineering of Germany to carry out an engineering Feasibility study to determine the commercial viability of the pipeline.
1999 - The Engineering Feasibility Study, which was completed in March 1999
It concluded that
* It is technically feasible to achieve project implementation;
* A potential demand for natural gas has been identified in the countries concerned;
* No major legal aspects have been identified which could obstruct project implementation.
* It is feasible to implement the project in a timely manner to achieve a first
gas delivery by January one, 2002.
* However, this would require a very high degree of co-operation and recognition
of regional rather than individual interest.
May 6, 1999 - Commercial Group made up of Chevron Nigeria Limited,
NNPC, Shell petroleum Company of Nigeria Limited, GNPC, Societe Benniise de Gsz
SA; and Societe Togolaise de Gas SA approved by governments of four countries as
project developer.
August 11, 1999 - Four countries and Commercial Group enter into a
Definitional Phase Memorandum of Understanding to enable the fuel definition of
the project by the Commercial Group so as to allow the taking of final investment decision.
February 4, 2000 - Signed Inter-Governmental Agreement, which expands and elaborates on the "Heads of Agreement" of 1995.
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