Tue, Apr 23 2024 23 April, 2024

Trans-Saharan pipeline uncertain after coup: experts

The Trans-Saharan gas pipeline project connecting Nigerian and Algerian gas pipelines to Europe faces uncertainty due to political turmoil and sanctions following the Niger coup.

The Sahara Desert near the city of Erfoud in Morocco (Photo credit: Jakub Korczyk/Adobe Stock)

Experts have warned that the Trans-Saharan Gas pipeline project planned to connect natural gas pipelines from Nigeria to Algeria to plug into European gas supplies may be halted due to the Niger coup.

In 2022, Algeria, Nigeria, and Niger signed a Memorandum of Understanding to rebuild a natural gas pipeline across the Sahara Desert. The three countries agreed to revive the stalled project, conceived 40 years ago.

The pipeline, which is estimated to cost $13 billion, has a Nigerian section named the Ajaokuta-Kaduna-Kano, which starts from Warri and runs north through Niger to Hassi R’Mel in Algeria where it will connect the existing Trans-Mediterranean, Maghreb–Europe, Medgaz and Galsi pipelines. The gas transmission terminals at El Kala and Beni Saf on Algeria’s Mediterranean coast would supply Europe. The distance of the pipeline would be 4,128 km – of which 1,037 km is in Nigeria, 841 km in Niger, and 2,310 km in Algeria.

On July 26, 2023, the presidential guard of Niger detained President Mohamed Bazoum during a successful coup. Presidential Guard Commander General Abdourahamane Tchiani assumed control of a new military junta.

In reaction, the Economic Community of West Africa (ECOWAS) imposed sanctions on Niger, freezing all service transactions, including energy transactions, between ECOWAS and Niger. Nigeria also shut off the 80 MW Birnin-Kebbi power line as a result of the sanctions, and Ivory Coast halted imports and exports of Nigerian commodities. Similarly, the African Union also suspended Niger from all its activities following the military coup there and told its members to avoid any action that might legitimize the junta.

Some experts have said that the division of the East and West, a power struggle in Africa over the coup, is connected to their interest in the gas supply.

African supply to Europe

Dr Ayodele Oni, a partner at Bloomfield Law Practice, noted following the Russia-Ukraine war, that Europe was forced to reduce its reliance on gas supplies by Russia due to the gas supply cut-off to Europe. He said Europe had to look for alternative energy sources, either gas or renewables.

“Owing to the nature of renewables and the time required to harness the same, supply of gas from alternative sources properly becomes a preferred option. An opportunity abounds for Nigeria in this instance due to its large gas reserves. Prior to the war, Russia supplied over a third of Europe’s gas.

“However, though Nigeria has the capacity, a problem exists with the output. One of the major issues Nigeria has is infrastructure. Solving Europe’s energy problem can be achieved by supply of pipeline gas or liquefied natural gas (LNG). Pipeline gas may be Europe’s preferred option because it is cleaner than LNG and Europe are the pioneers of the Emissions Trading Scheme.”

Ayodele said that freezing energy transactions to Niger may not immediately affect the pipeline because it is not yet operational. However he said in the long run, if this persists, the pipeline project may become impacted by the strife that exists between both countries. “Ultimately, this may negatively affect Europe’s hopes for gas pipeline supply from Africa unless LNG is utilized.”

Adebayo Jogunsinmi, head of investment and strategy at International Energy Services Limited, said the recent political upheaval in Niger represents a significant setback to the pipeline project. The oil and gas expert also noted the strategic importance of the project as a cornerstone of the European Union’s endeavour to diversify its gas supply sources and reduce reliance on Russian imports. “This coup has instigated apprehensions regarding both the security of the pipeline infrastructure and the broader political stability of the region.”

Adebayo said the implications of shelving the pipeline for Nigeria’s decarbonization aspirations could also necessitate a greater reliance on alternative energy sources, notably renewable energy. He said this could help the country to fulfill its climate objectives toward fostering a cleaner and more sustainable society.

“In summation, the ramifications of the Niger coup for Nigeria’s decarbonization ambitions are intricate and contingent on unfolding developments. The long-term impact remains uncertain. However, it is evident that the coup has inflicted a severe setback on the Trans-Saharan gas pipeline project,” he said.

“It is pivotal to acknowledge that the situation in Niger remains fluid and evolving. While a prompt resolution to the coup could potentially pave the way for the continuation of the Trans-Saharan gas pipeline project, it undeniably constitutes a formidable impediment with uncertain long-term implications,” he added.

Murtala Ibin, a climate and security analyst, said the sanctions on Niger are impacting a wide range of sectors, including the energy sector. He said it’s unclear how far Niger has gone with its section of the pipeline and the nature of the impact the sanction will have on it.

“The project has been in limbo for a while until last year when it was revived. As such delays as a result of sanctions and the crisis in Niger could push the timeline longer, even though the completion would have taken years to do. Nigeria is currently building a national gas pipeline from the south to the north and that project is expected to form part of the Trans Sahara project.”

Impact on Nigeria’s ‘Decade of Gas’

Nigeria has a ‘Decade of Gas’ government-led initiative. It was launched in 2021 to harness Nigeria’s vast gas reserves to drive economic growth and development. Based on the plan, the federal government aims to generate $12 billion in royalties and taxes, attract $14 billion in foreign direct investment, and add two million jobs by 2030.

Ayodele said the objective of the Decade of Gas by former President Buhari was to stimulate the development and utilization of gas resources for increased domestic use and export towards generating more revenue for the nation, a plan critics would say is counter to efforts to phase out gas and thus decarbonize Nigeria, in line with the climate goals of the Paris agreement.

He said the halting of energy transactions with Niger would rob Nigeria of the opportunity to earn foreign exchange through Nigerian power generation companies’ sale of electricity to Niger. “Furthermore, it may invariably affect the proposed Trans-Saharan gas pipeline project, as it is one the biggest gas infrastructure projects for utilization of Nigeria’s large gas reserves internationally.”