September 13, 2008


Worried by last month's invasion of Georgia by Russia, the European Union (EU) is pinning its hope of regular gas supply in the future on the planned $10billion trans-Saharan gas pipeline project. The project, through which Nigerian gas will be piped into Europe via the Sahara desert, is seen as the safest alternative to Russian gas. Five European Union members are wholly dependent on Russia for their natural gas. Four others receive more than 50 percent of their natural gas from Russia. A third of all EU oil imports come from Russia. Russia is turning out to be a bully in the region and energy experts believe that it will not hesitate to use energy as a weapon. On December 1, 2006, Russia cut off natural gas supplies to and through Ukraine because of a contract dispute. With about 80 percent of the natural gas Europe imports from Russia passing across Ukraine, the effects were felt not just in Ukraine, but as far as Italy. In May last year, Russia cut off delivery of oil products and coal to Estonia because the country decided to move a monument to the Red Army to a less prominent location. EU Energy Commissioner, Andris Piebalgs, who expressed deep interest in plans to develop the 4,300-kilometre trans-Saharan Gas Pipeline from Nigeria through Niger and Algeria en route the Mediterranean, admitted that it could help the group diversify its energy sources. Piebalgs, who is in Nigeria, ahead of talks on energy projects and peace in the restive Niger Delta said: "Nigeria is already very important for our security of supply — 20 percent of their oil and 80 percent of their gas goes to Europe". Nigerian gas is currently shipped to Europe as liquefied LNG. A pipeline is therefore seen as improving security in Africa's transit regions, thereby reducing the flood of migrants to Europe. "The development of a trans-Saharan project with 20 billion cubic metres a year that might arrive to Europe by 2015 and increase the security of supply of Nigeria itself and the countries it crosses, makes it a very interesting project for Nigeria and Europe," said Piebalgs. Nigeria has the world's seventh-largest proven gas reserves, but has been unable to develop its gas industry to anywhere near its full potential because of a lack of funds and regulation. The EU is not alone in courting Nigeria for its oil and gas reserves. Last week, Russian gas giant, Gazprom signed an oil and gas exploration agreement with Nigeria with the hope of developing LNG exports to North America. Nigerian Compass front page.

No comments: