UNDER CONSTRUCTION / PLANNED

West Africa

Nigeria-Benin-Togo-Ghana  West Africa Gas Pipeline
In the 1980’s the Economic Community of West African States (ECOWAS), in conjunction with the member governments of Nigeria, Benin, Togo and Ghana, first proposed the idea of a regional natural gas pipeline system to help promote economic growth.  An initial feasibility report, prepared for the World Bank in the early 1990’s, deemed that a pipeline to transport Nigerian natural gas to Benin, Togo and Ghana was commercially viable. The report’s conclusion was based on the U.S.-firm Chevron’s associated gas reserves in Nigeria’s Escravos region. In September 1995, the governments of the four nations signed an agreement for the supply and transmission of natural gas.

Chevron, in 1997, completed the first phase of its Escravos Gas Project (EGP). The EGP, in which the Nigerian National Petroleum Corporation (NNPC) holds a 60% share and Chevron a 40% share, is one of several projects Nigeria is undertaking to better utilize its natural gas reserves. The first phase of the EGP was completed in six years at a cost of $570 million, and it currently processes 165 Mmcf/d of associated gas. The EGP's second phase, which could be used to supply gas to the pipeline,  is expected to come online by the end of 1999.

The El Nino-induced energy shortage (1997-1998) experienced by Ghana, Togo, and Benin renewed interest in the pipeline project. In August 1998, a consortium of Chevron, Shell, NNPC, Ghana National Petroleum Corp. (GNPC), Societe Beninoise de Gaz (SoBeGaz), and Societe Togolaise de Gaz (SoToGaz) signed an agreement commissioning a feasibility study on the West Africa Gas Pipeline (WAGP).  The study, which was completed in March 1999, concluded the commercial and technical viability of the WAGP, and it projected that it could be operational as early as 2002. On August 11, 1999, in Cotonou, Benin,  a Memorandum of Understanding was signed by the four countries and the consortium establishing the legal framework for the WAGP. The Joint Venture Agreement naming Chevron as the WAGP project manager was signed on August 16, 1999 in Abuja, Nigeria.

The WAGP will run approximately 620 miles (990 kilometers) offshore from the EGP to Effasu in Ghana. Proposed landfall spurs will be at Lagos (Nigeria), Cotonou (Benin), Lome (Togo), Tema (Ghana) and Takoradi (Ghana).  The initial capacity of the WAGP will be 200 Mmcf/d, with the capability to expand to 600 Mmcf/d as demand grows. Initial deliveries of 120 Mmcf/d of gas are forecast to begin in 2002. The total cost of the WAGP is estimated at $400 million, with an additional $600 million being spent on the development of  power facilities to utilize the gas.

Chevron has signed a 20-year agreement to supply natural gas, via the WAGP, to the 220-MW power plant currently under construction in Tema, Ghana . Under terms of the contract, the plant will receive 40 Mmcf/d of natural gas.

A study, commissioned by Chevron, estimates that 10,000 to 20,000 primary sector jobs will be created in the region. New power supplies, fueled by gas from the WAGP, will stimulate the growth of new industry.  The industrial growth has the potential to spawn an additional 30,000-60,000 secondary jobs. In addition to the $1 billion in investment (WAGP and power facilities) already projected, the study sees approximately $800 million in new industrial investment occurring in the region. The World Bank estimates that Benin, Togo and Ghana can save nearly $500 million in energy costs over a 20-year period as WAGP-supplied gas is substituted for more expensive fuels in power generation.