By Gideon Osaka
In a significant step towards bolstering regional cooperation and mutual development, Nigeria and Equatorial Guinea recently, signed an agreement to construct a gas pipeline called the Gulf of Guinea Gas Pipeline.
According to the Nigerian presidential spokesperson, Ajuri Ngelale in a statement on Thursday, August 16, the agreement was reached between both countries when the Nigerian President Bola Tinubu met with President Teodoro Obiang Nguema Mbasogo in the Central African country during a three-day visit to discuss issues ranging from employment and conflicts to food security among others.
The gas pipeline agreement signed in Equatorial Guinea’s capital Malabo, covered legislative and regulatory measures for the gas pipeline, establishment and operation, transit of natural gas, ownership of the gas pipeline, and general principles governing the project.
Valuechain reports that under the terms of the deal, the pipeline will transport gas from Nigeria to Equatorial Guinea, and be processed at state-owned Equatorial Guinea’s liquefied natural gas processing Punta Europa LNG facility on Bioko Island – signaling new opportunities for energy security on the back of the bilateral collaboration.
Equatorial Guinea’s GMH facility at Punta Europa, commissioned in 2007, initially processed gas from Marathon Oil’s offshore Alba Field, however, encountered natural gas declines, requiring alternative sources to be developed.
The country has been actively expanding its gas infrastructure, with recent deals with Marathon Oil Corp. and Chevron to enhance the capacity of the Punta Europa facility.
The first phase of expansion, completed in 2021, involved the tieback of Noble Energy’s offshore Alen Field to the facility, with the first gas following later that year.
Under the second phase, gas from Alba will be processed under new contractual terms, and a third phase will process gas from the Noble-operated Aseng Field (Noble is owned by Chevron).
Earlier this year, Equatorial Guinea signed a bilateral trade agreement with Cameroon to develop oil and gas projects along their shared maritime borders, including the Yoyo and Yolanda fields, the Etinde gas fields, and the Camen and Diega fields.
The Gulf of Guinea Gas Pipeline project solidifies Equatorial Guinea’s position as a regional gas hub, while also providing a valuable market for Nigeria’s abundant gas reserves.
Nigeria, Africa’s biggest economy has also been looking to diversify its market. A gas pipeline will provide the requisite infrastructure for this expansion into countries like Equatorial Guinea, gradually emerging as important player in the region.
According to Antonio Oburu Ondo, the Minister of Mines and Hydrocarbons of Equatorial Guinea during the deal signing, the agreement marks a significant milestone in Equatorial Guinea’s GMH initiative, reinforcing its position as a regional leader in gas monetization.
“By partnering with Nigeria on the Gulf of Guinea Gas Pipeline, we are not only strengthening bilateral cooperation but also regional collaboration to ensure a secure and reliable supply of gas for our LNG facility at Punta Europa for years to come. This project will unlock immense economic value for both our nations, driving sustainable development and energy security across the region,” the minister said.
Both Nigeria and Equatorial Guinea are important exporters of oil in the international market while the former is Africa’s second-largest producer of oil and gas and among the top fifth biggest sources of Liquefied Natural Gas (LNG) in the world.
The signing of the Gulf of Guinea Pipeline Project agreement has been hailed as a strategic move for Africa’s growth, with both leaders expressing optimism about the potential benefits it will bring to the region.
Speaking on why the $2.5bn 200-kilometer Gulf of Guinea gas pipeline project is essential for the growth of the Nigerian economy, Minister of State for Petroleum Resources (Gas), Mr. Ekperipke Ekpo, said the project would increase Nigeria’s upstream gas production and generate significant economic gains for the two countries.
He said the project would create substantial employment opportunities in the gas value chain, with construction of the pipeline involving workers from the two countries.
“What is going on is that Equatorial Guinea has the LNG plant, gas plant, methanol plants, but they don’t have sufficient gas to drive it, and Nigeria, as a country, we have the feedstock, that is, the natural gas.
“So within this period, after the signing, negotiation will go on to construct a gas pipeline that will be up to 200 kilometers in length between Nigeria and Equatorial Guinea for transfer of gas from Nigeria to Equatorial Guinea.
“This will bring about increase in the upstream of gas in Nigeria and it will bring about economic gains between the two countries. We’ll give the feedstock and they’ll process it and either export it and then generate revenue that will be beneficial to the two countries.
According to statistics, Nigeria ranks within the top 10 largest natural gas reserve holders in the world, with its gas reserves accounting for about three percent of the global total production. The country’s reserves could potentially be as high as 600 trillion cubic feet (tcf), if deliberate steps are taken to explore for gas.
Due to the current low domestic and industrial usage of natural gas and the limited gas distribution infrastructure, oil companies producing natural gas in the associated form have been compelled to flare these gases partly due to the absence of an interconnecting network of gas pipelines and limited regional market. The new Gulf of Guinea gas pipeline project will unlock new opportunities for gas exploration.
Addition to ongoing regional gas projects
Nigeria’s gas exports are a significant source of revenue, and the country’s strategic location on the Gulf of Guinea enables it to supply markets in Europe, Asia, and the Americas. The Nigerian government has implemented various initiatives to boost gas exports as stated in the Nigerian Gas Master Plan, which aims to expand the country’s natural gas infrastructure.
The new Gulf of Guinea pipeline agreement adds to other key regional ongoing gas projects, like the Nigeria-Morocco Gas Pipeline and the Trans Sahara Gas Pipeline Project which seeks to transport gas ultimately to Europe.
In 2016, Nigeria took a significant step towards realizing its huge gas potential by entering into an agreement with Morocco to construct the Nigeria-Morocco Gas Pipeline (NMGP). Set to become the second-longest pipeline in the world; Nigeria-Morocco Gas Pipeline (NMGP) will cross 13 African countries, helping to meet the energy demand of 400 million West Africans, while delivering Nigerian gas to Europe.
This ambitious project, designed to promote regional integration and bolster energy security across West Africa, is set to provide an export route for African gas to Europe, thereby solidifying Nigeria’s role as a key player in the global energy market.
The NMGP project is supported by the Economic Community of West African States (ECOWAS), reflecting its strategic importance to the region. With an estimated cost of $25 billion, the pipeline is expected to have a capacity of 30 billion cubic meters of gas per year. This substantial infrastructure project will be executed in three phases, each meticulously planned to link up with existing gas networks, thereby ensuring a seamless and efficient flow of gas across borders.
The pipeline’s route will traverse several West African countries, ultimately connecting Nigerian gas supplies to Morocco and onwards to Europe via Spain. This not only opens new markets for Nigerian gas but also provides a reliable energy source for countries along the pipeline’s path, many of which currently struggle with energy access and security.
Upon completion, the gas pipeline will be the world’s longest offshore pipeline second longest pipeline overall. Based on the 25-year estimate given in 2017, construction will be completed by 2046. In June 2023 it was reported that Côte d’Ivoire, Liberia, Guinea, and Benin had signed agreements with Morocco and Nigeria to participate in the gas pipeline project. Following this development, a total of ten states are now involved in the project, building upon the agreements previously signed with ECOWAS, Mauritania, Senegal, Gambia, Guinea-Bissau, Sierra Leone, and Ghana.
The Trans-Saharan pipeline (also known as the Algeria-Nigeria Gas Pipeline Project) is a joint project between Nigeria, Algeria and Niger. The plan is for a 4,000 km pipeline to ferry up to 30 billion cubic meters of gas a year from Nigeria, through Niger, to Algeria where it would connect up with existing pipelines across the Mediterranean to Europe.
The total length involved is 4128 kilometers (2565 miles) with the Nigerian section being 1,037 kilometers (644 miles), Niger Republic 841 kilometers (523 miles), and 2,310 kilometers (1440 miles) in Algeria.
The 4128km pipeline will leverage a large regional network of oil pipelines in West and North Africa, including the Maghreb-Europe Gas Pipeline and Medgaz Gas Pipeline. The $13bn pipeline presents strong economic opportunities for Nigeria, Algeria, and Niger, enabling these countries to tap into gas-hungry European markets while monetizing their respective natural resources.
With the establishment of a dedicated task force and roadmap for the project’s development already in place, the pipeline is expected to commence operations by 2030. The project will be built and operated by the Nigerian National Petroleum Company Limited and Algeria’s state-owned Sonatrach and will be owned by NNPC, Sonatrach, and Italian power engineering company, Ansaldo Energia.