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West African Gas Pipeline a model for Intra-African trade

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Regional gas pipelines offer an opportunity for economic growth across the African continent. Image credit: Pxfuel

The West African Gas Pipeline (WAGP) is a good model for Intra-African trade that could be adopted by other emerging natural gas regions across Africa.  

The WAGP comprises a 681km natural gas pipeline and is the first regional natural gas transmission system in sub-Saharan Africa, linking Nigeria’s gas-rich region of the Niger Delta to neighbouring countries Benin, Togo, and Ghana.

As a widely available resource in Africa, natural gas has seen an influx of investment and development in recent years, with many stakeholders hoping to use gas as a catalyst of economic growth.

With emerging natural gas markets in Nigeria, Mozambique, Senegal and Tanzania offering new energy sources for regional actors, and the African Continental Free Trade Agreement (AfCFTA) ensuring lucrative trade opportunities across the continent, attention is turning to regional distribution, with models such as the West African Gas Pipeline (WAGP) taking the lead.

The West African Gas Pipeline (WAGP) is a good model of Intra-African trade that could be adopted by other emerging natural gas regions across Africa.

Comprising a 681km natural gas pipeline, the WAGP is the first regional natural gas transmission system in sub-Saharan Africa, linking Nigeria’s gas-rich region of the Niger Delta to neighbouring countries Benin, Togo, and Ghana.

With more than 200 trillion cubic feet (tcf) of natural gas reserves in Nigeria, and growing demand across the entire West African region, the WAGP enables the transportation and distribution of critical gas reserves from gas-rich countries to high demand markets, establishing a viable gas network that will accelerate regional energy access.

The WAGP has significantly increased regional gas utilisation, with the AfCFTA and the recent passage of Nigeria’s Petroleum Industry (PIB) Bill only enhancing this trend.

Rather than solely focusing on exports to international markets, WAGP operator West African Gas Pipeline Company – comprising a consortium including Chevon West African Gas Pipeline (36.9%), Nigerian National Petroleum Corporation (24.9%), Shell Overseas Holdings Limited (17.9%), Takoradi Power Company Limited (16.3%), Societe Togolaise de Gaz (2%) and Societe BenGaz S.A. (2%) – recognises the value of increasing regional gas trade, with a high demand regional population and neighbouring markets offering fundamental opportunities regarding exports.

Enhancing regional gas networks

In addition to the WAGP, there has been notable success in enhancing regional gas networks in the MSGBC region, comprising Mauritania, Senegal, the Gambia, Guinea Bissau, and Guinea Conakry.

With major natural gas reserves discovered on the border of Senegal and Mauritania – estimated at 40 tcf – the region has been quick to develop a viable regional market and position Senegal as an African gas province.

However, the region still requires significant investment if it to fully capitalise on its resources and establish sustainable gas transportation systems. There are lucrative opportunities for international stakeholders looking at promising African markets. According to NJ Ayuk, Executive Chairman of the African Energy Chamber, the African Energy Week (AEW), that will take place in Cape Town in November, will serve as the ideal platform for intra-Africa and global-African engagement.

An example for other gas-rich countries

In the meantime, the WAGP serves as an example for other gas-rich countries looking towards regional exports. The Southern African Development Community (SADC), for example, could significantly benefit from regional gas networks such as pipelines or other distribution systems.

Countries such as Mozambique, with over 100tcf of gas, and Tanzania, with over 57tcf, could be established as regional gas hubs, with foreign investment directed towards infrastructure development serving as an enabler of regional gas utilisation and distribution.

SADC countries with no gas reserves such as Zimbabwe and Zambia can significantly benefit from regional networks, making use of alternative energy sources provided for by regional pipelines. Additionally, countries such as South Africa, which relies heavily on gas imports to sustain its growing economy, will benefit from a regional gas network.

Additionally, the Economic Community of Central African States (CEMAC) can also benefit from regional gas trade, with resource-rich countries such as Equatorial Guinea and Gabon serving as regional hubs.

Rather than direct activities towards international exports, both Equatorial Guinea and Gabon can ensure a valuable source of revenue through regional exports, with growing demand in the entire region serving as an ideal target market.

By prioritising trade infrastructure and transportation systems, and targeting both regional and international investment accordingly, the CEMAC region can use gas a catalyst for regional energy and economic growth.

Gas offers significant opportunities

Gas has the potential to not only drive energy access and regional integration, but to accelerate Africa’s energy transition on a large-scale basis.

“The WAGP offers significant opportunities for regional actors looking to increase the share of natural gas in their energy mix. Just because countries lack natural gas resources does not mean they cannot utilise the resource.

“By developing regional trade networks across the continent, made more effective through the AfCFTA and regulations such as the Petroleum Industry Bill (PIB), Africa can become the leading producer, distributor, and utiliser of natural gas, driving economic growth and the energy transition,” says Ayuk.

In addition to promoting the WAGP and other pipeline opportunities across the continent, AEW 2021 is committed to introducing western technological pipeline solutions to emerging African markets, ensuring the uptake of modern infrastructure solutions that will advance energy sector growth and regional gas networks.

Companies such as Galileo Technologies – a technology company focused on enhancing the production, transportation and consumption of natural gas, biomethane and hydrogen through unconventional solutions – will be promoted at AEW 2021, with the aim of increasing partnerships and regional developments.

With operations in over 70 countries worldwide, and a commitment to improving client competitiveness and environmental quality, Galileo is keen on sharing their advanced technology with African stakeholders, providing transportation and distribution solutions to markets either without or formerly outside of gas transport systems.

The WAGP is a clear example of the success of regional collaboration, and African Energy Week (AEW) 2021, taking place in Cape Town on the 9th-12th of November, will emphasise this.

AEW 2021 will promote regional gas networks, provide valuable engagement opportunities for African and international stakeholders, and introduce advanced technological solutions regarding companies such as Galileo to African projects. AEW 2021 is committed to African people, African energy, and African regional growth and will drive this narrative in Cape Town.

For more information about Africa’s premier energy event, visit www.aew2021.com or energychamber.org and/or email Amina Williams at amina.williams@energychamber.org

This article was first published on the African Energy Chamber. WhyAfrica is one of the official media partners of the African Energy Week that takes place in Cape Town in November.

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