A Review of the Nigerian Energy Industry

West African Gas project fails to deliver results

Map showing the West African Gas Pipeline network.
Map showing the West African Gas Pipeline network.

*Nigeria pays Ghana $10m for non-delivery of gas

Oscarline Onwuemenyi,
with agency reports

23 January 2015, Sweetcrude, Abuja –
The oft-touted West African Gas pipeline project may be in for some tough times due to the inability of Nigeria, the main initiator and country possessing the largest gas reserves in the region, to meet its supply obligations.

Ghana’s President, John Mahama recently said that Nigeria had to pay Ghana the amount of $10 million in penalties for failing to deliver the quantity of gas spelt out under the West African Gas Pipeline project.

Nigeria’s failure to provide enough of gas in accordance with the contract has led to the power plants that rely on gas from the West Africa Gas Pipeline to be been shut down, according to reports.

The populous West African country was expected to provide at least 120 million cubic feet of gas daily but reports say it has consistently defaulted.

The failure of Nigeria to meet its contractual obligations to Ghana has led to a protracted power crisis in the country.

Officials of the Ghana Grid Company earlier this week indicated they have been forced to shed between 400 and 600 megawatts of power due to the inconsistent and reduced supply of power from the local power generators who also blame their inability to generate more power on the insufficient supply of gas from Nigeria through the West African Gas pipeline.

President John Mahama said the country is looking at developing its own gas reserves. “Potentially we can get 150 million standard cubic feet from the Jubilee field, we are developing the TEN field which will come on stream in 2016 and that again can provide us with between 50-80 million standard cubic feet.

“So going forward we are looking at about between 300-350 million standard cubic feet which will be very important in generating power and ensuring energy security for us,” he stated.

The Nigerian government has described the West African Gas Pipeline project as having the capacity to revolutionise the gas infrastructure and, therefore, industry within the sub-region, but the project has been constantly beset by issues such as pipeline vandalism at the Nigerian end.

The Nigerian authorities we reached out concerning this report could not get back to us before publication.

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