| The West African Gas Pipeline project is set to suffer further delays and the Board of Directors of the West African Gas Pipeline Company considers Delattre Bezons Nigeria and Zachem International as new contractors for the project.
The development followed the termination of Willbros Nigeria Limited as the contractor for the $590m, 678kilometre pipeline project on February 27, 2008. Our correspondent exclusively gathered that the board at its meeting on Tuesday, pencilled down the two companies as the new contractors for the project following a dispute with Willbros on cost variation. The board is on the verge of deciding which of the two oil services companies would be awarded the remaining part of the project, which was put up for re-tender. Disputes on cost it was gathered arose when Willbros demanded a 30 per cent increase for the execution of the remaining parts of the project. According to sources close to the meeting, �Willbros has done about 80 per cent of the total project at the time the contract was terminated.� With the termination of the contract, the indigenous oil service firm was demanding the sum of $170m, representing the outstanding sum of the work done. Although the whole matter is being done in a hush-hush manner, industry analysts believe this might have serious implications for the delivery of the project. Initial projections for the project was such that start up was slated for December 2006, to transport natural gas from Nigeria to Ghana, Benin and Togo. Our source disclosed that Willbros had already delivered the pipeline from Nigeria to Ghana, free for gas delivery as at December 21, 2007, but the company could not deliver the product, which would be devoted for power and industrial uses. The shareholders of WAPCo include Chevron West African Gas Pipeline Limited (36.7 per cent); NNPC (25 per cent); Shell Overseas Holdings Limited (18 per cent); and Takoradi Power Company Limited (16.3 per cent), Societe Togoliase de Gaz (two per cent) and Societe BenGaz S.A. (two per cent). According to our source, the 30 per cent cost variation was to in line with current inflation and environment of the project. He said, �They were asking for 30 per cent higher because of worldwide inflation for the procurement of materials, the addition costs to work in Nigeria, in view of the security issues and the additional costs of executing the project in Nigeria, which include the training of people over and above the requirements.� |
May302008