The construction of the $13 billion pan-African Trans-Saharan Gas Pipeline is increasingly coming to threat with the festering Niger Delta crisis and the al Qaeda insurgent activities along the project route.
The pipeline, which is a joint venture initiative by Algeria, Nigeria and Niger Republic, was designed to convey the abundant natural gas resources from Nigerian oil and gas fields in the Niger Delta region across he Sahara for supplies in European markets.
But, with the crisis in the Niger Delta in which armed youth groups are attacking the facilities of multi-national oil companies operating in the region and taking their workers hostage, the source of supply of gas required to run the project appears a huge set back.
The problems associated with banditry, separatist revolts and al Qaeda-affiliated gunmen campaigns in the Sahara region are also issues capable of derailing the initiative, though not a few experts believe the project could be protected from the physical dangers.
Tuareg rebel groups in Niger and Algeria’s al-Qaeda-aligned Salafist Group for Preaching and Combat (GSPC) operate in the areas bordering Niger and Mali.
“It is the economics, rather than the security risks, that will determine whether gas destined to fuel European homes and offices will ever flow beneath Africa’s biggest wilderness,” one analyst said over the weekend.
Though he acknowledged the seriousness of the security issues, the analyst is however of the view that problems could be overcome if the economics are right.
An official of a UK-based business intelligence consultancy, Gavin Proudley, noted: “Long pipelines are (technically) challenging. And cross-border pipelines are traditionally very troublesome.
Jim Jensen of Jensen Associates, an official of another U.S.-based gas consulting firm, the Trans-Saharan gas project appears to have two issues that are threatening its execution, though he said its economics seem to be feasible.
Last month the three partnering countries said they were seeking a finance package for the project from investors following the evaluation of the technical and economical viability of the project by a UK consultancy Penspen/IPA.
With costs of $10 billion for the pipeline and $3 billion for gathering centres, the project will send up to 30 billion cubic metres of gas per annum to Europe through a 4,128 kilometres (approximately 2,580 miles) pipeline crossing Nigeria, Niger and Algeria, commencing 2015.
The project is looking for support from European governments and gas consumers, which have expressed concerns about falling domestic supplies and increasing reliance on gas piped in from Russia.
Nigeria�s Minister of State for Petroleum Resources, Edmund Daukoru,describes the project as �bankable,� dismissing the Niger Delta crisis as capable of derailing its implementation, adding that militants stepping up attacks on oil facilities and kidnapping expatriates are temporary phenomena.
London-based independent energy analyst and risk consultant on Africa, Antony Goldman, is not that optimistic.
“The present security climate in Nigeria is not really conducive to an extraordinary project like this … there is no quick fix to the security issues in the Delta and to build a massive project like this you would have to have long-term security guarantees that, at present, look hard,” Goldman said.
Kevin Rosser, an oil and gas security specialist at Control Risks Consultancy was more positive.
“There are some genuine threats, but on the whole they can be managed by some very simple techniques,” he said.