VS’is an energy project that threatens to disrupt the situation in the gas market between Africa and Europe. On Sunday June 19, the Energy Ministers of Algeria, Niger and Nigeria agreed, in Abuja (Nigeria), to launch technical studies for the Trans-Saharan Gas-Pipline (TSGP) megaproject which will connect the fields south-eastern Nigeria (Niger Delta) to Algerian terminals on the Mediterranean coast to then be linked to Europe via gas pipelines to Spain and Italy, i.e. 4,100 km of pipelines. The three leaders, Algerian, Nigerien and Nigerian, wish to concretize this project in “as soon as possible”. Last February, the three leaders had launched, in Niamey (Niger), a Task Force responsible for monitoring the project which is one of the priorities of NEPAD (New Partnership for Africa’s Development).
A strategic issue
According to expert estimates, the trans-Saharan gas pipeline can be completed in three years and could transport 20 to 30 billion cubic meters of gas from Nigeria. During the first estimates of its cost of realization, dating from 2009, the envelope was around ten billion dollars. A cost certainly to be reassessed upwards, probably double the 2009 estimates. through the transport network, liquefied natural gas stations [GNL] and petrochemical infrastructures, as well as the geographical position close to gas markets,” explains the official Algerian news agency APS. “Ensuring the supply of markets and ensuring a better positioning of the three countries [Algérie, Nigeria et Niger] in the global chessboard of energy transition and sustainable development”, are the main objectives of the TSGP, according to the Algerian Minister of Energy, Mohamed Arkab.
“The emergence of an African energy market”
“The reactivation of the TSGP project takes place in a particular geopolitical and energy context, marked by strong demand for gas and oil, on the one hand, and by a stagnant supply due to the drop in investments, in particular in the upstream oil and gas, started since 2015”, explained the Algerian minister again during the meeting in Abuja. For Algiers, this gas pipeline presents itself as “a new source of supply for the markets, whose demand is constantly growing, given the place that natural gas will occupy in the future energy mix”. Algeria also wishes, through this project, to promote “the emergence of an African energy market”, as well as “the pooling of the genius and resources of national hydrocarbon companies, for the development of a independent industry. As a reminder, Africa has 8% of the world’s gas reserves.
“The overall impact of the realization of this major project, in addition to the transport of gas to the European market, will be to allow the supply of natural gas to the desert regions crossed, including those of certain regions of neighboring countries of the pipeline route. It will also supply food in its path to the northern, northeastern and central regions of Nigeria, as well as to the countries of the Sahel, such as Niger, Burkina Faso and Mali”, indicates the daily. El Watan. “A large part of the cost of the pipeline will be devoted to Niger, which will benefit from significant socio-economic benefits and which will at the same time be able to monetize its own gas reserves”, continues the Algerian newspaper.
Gazprom in ambush
The project was formally recorded in 2001, following the signing of a memorandum of understanding between Algeria and Nigeria. In 2002, the two Algerian and Nigerian majors, Sonatrach and the Nigerian National Petroleum Corporation (NNPC), created a company in London to finance this project which, in the end, returned to the drawers for lack of a viable economic situation before it only resurfaced in 2009 following a new tripartite agreement for its implementation, an agreement this time including Niger.
As ambitious as it is, the Trans-Saharan Gas Pipeline megaproject faces several major challenges, including the availability of gas reserves in the Niger Delta, the risks associated with the various armed groups that swarm along the pipeline route, delays in the GALSI project (gas pipeline linking Algeria to Italy via Sardinia), and the viability of financing such a huge technical installation, according to a note from IFRI. According to IFRI, the European Union had shown interest in this new energy supply channel, but only verbally, reacting temporarily to the interest in the TSGP expressed by Gazprom, the Russian gas giant. Still according to the IFRI document, Gazprom has been developing for years a “strategy of encirclement of all the gas states capable of supplying the TSGP or liquefying gas destined for the EU”.
The other challenge of the trans-Saharan gas pipeline is that it competes with the similar project linking Nigeria to Morocco, which just got the green light on 1er last June, from Abuja.
Competition with Morocco
This is a project about which the Algerian authorities, unsurprisingly, have expressed doubts. “Our gas pipeline [TSGP] is safer and it is economically viable, the Algerian Minister of Energy recently told the Spiegel. The other pipeline [entre le Nigeria et le Maroc] would cross 12 countries over 6,000 kilometers and part of the Atlantic. It is infinitely more complicated. And the funding isn’t clear either. Algeria, on the other hand, has the means and is willing to finance a large part of the trans-Saharan gas pipeline. »
Nigeria-Morocco: the gas pipeline project is accelerating