New gas pipeline project to Europe is at risk of failure

Ngọc Vân |

The new gas pipeline project to Europe is at risk of collapsing into smoke clouds due to increasing economic and security issues.

For more than 20 years, Nigeria has been trying to build a gas pipeline through the Sahara desert to Algeria and to customers in Europe.

The pipeline is expected to help increase gas exports and bring money to the state treasury of Nigeria. The plan will be boosted in 2021 as Russia conducts a military campaign in Ukraine, forcing Europe to seek alternative gas sources in the short term.

But now, when more problems appear, experts are questioning the wise of investing large sums of money in projects.

Europe's gas demand is declining and will likely be further met with liquefied natural gas (LNG) from the US and Qatar.

Meanwhile, gas theft from pipelines remains a problem as the northern regions of Nigeria and Niger - where the pipeline will pass through - become increasingly unsafe.

According to Climate Home, the Ninja government has spent more than $1 billion on pipelines in its area and plans to invest another $1 billion. Experts are concerned that most of this money could be wasted.

Ademola Henry is an independent consultant for the oil and gas industry. He warned that the pipeline could become economically impossible before it reaches its expected life.

He noted that if this happens, the government could have to increase borrowing, increase taxes or cut spending to cover losses.

Chukwumerije Okereke is a professor of global climate governance and public policy at the University of Bristol (UK). He said the pipeline "can bring socio-economic profits and benefits to the people".

However, he warned that gas theft and insecurity in Niger could pose significant challenges. Niger underwent a military coup last year and the new government has withdrawn from the Economic Zone of West African Nations (Ecowas), a regional political alliance. This complexes the situation, Okereke said.

He said the government must carefully consider any investment in the sector, especially with global commitments to trip renewable energy and Nigeria's abundant resources such as solar energy.

The trans Sahara pipeline is a joint project between Nigeria, Algeria and Niger. The plan is to build a 4,000-km pipeline to transport up to 30 billion cubic metres of gas per year from Nigeria, via Niger, to Algeria, where it will connect with existing pipelines across the Mediterranean to Europe.

With the leadership of state-owned oil and gas companies Nigeria and Algeria, the pipeline was originally scheduled to open in 2015, but there was no progress from 2009 to 2019.

In 2019, the pipeline began to be mentioned in planning documents. The three governments then signed an agreement to speed up the process after Russia launched a military campaign in Ukraine, forcing Europe to seek more non-Russian gas sources.

At the time, then-Nigeria oil minister Timpire Sylva told EU diplomats that Nigeria wanted to sell them more gas, which he said would "resolve the energy problem in Europe".

But Sylva was not the only one to make the offer. The US has increased investment in export ports to transport LNG to Europe and other places.

The International Energy Agency (IEA) predicts that Europe's gas demand will continue to decline as the continent accelerates plans to eliminate fossil fuels.

Currently, only a section of the pipeline in Nigeria - known as the AKK - is under construction.

Okereke warned: If the Nigeran government continues to implement a part of the trans Sahara project and launch it in July this year, despite instability in other participating countries, there will be a risk of property being held - which could lead to significant losses for the government, affecting taxpayers.

Ngọc Vân
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