Concerns over West Africa Gas Pipeline Project
The pipeline is designed to supply gas from the Escravos region of Niger Delta to feed generating plants of the participating countries.
The project, which was the first regional natural gas transmission system in sub-Saharan Africa, was initiated to, among others, channel away associated gas from Nigerian oil fields where gas is flared, generate employment for Nigerians and foster economic integration of the West African countries involved.
The World Bank and sponsors of the project – Shell and Chevron – had claimed that the WAGP would contribute to putting an end to gas flares in Nigeria and provide cheap energy.
However, more than 10 years after the project was embarked upon, Nigeria still flares more than 1.5 billion cubic feet of natural gas per day, which adversely affects the health of the people.
It is estimated that Nigeria loses about $2.5 billion yearly due to lack of infrastructure to harness gas.
The agreement to supply gas to the three countries under the WAGP project, as part of commitment to the West Africa Gas Project scheme, was subject to satisfactory supply to the domestic market including the power plants.
The World Bank provided a guarantee of $50 million for Ghana, while the bank’s Multilateral Investment Guarantee Agency also provided a $75 million political risk guarantee for the project.
The project, which runs both onshore and offshore, through the Republic of Benin, Togo and terminates in Ghana, was initially scheduled to flow gas from the Escravos to Egbin power station in Lagos and to some West African countries by June 2005.
Initially, the project was to have terminated in Senegal, but this was shelved owing to political instability in several countries where the pipelines would run through, notably Ivory Coast, Sierra Leone and Liberia.