A Major Pipeline Project That Will Transport Natural Gas From Nigeria to Europe

A major pipeline project that will transport natural gas from Nigeria to Europe through Algeria remains on track, Nigeria's state news agency reported Friday, citing Nigerian National Petroleum Corp. 

The report comes amid concerns that progress on the project may have been stalled by delays in getting Nigeria's oil reform through parliament. 

The Trans Saharan gas pipeline project was kick-started in 2002 when Nigeria and Algeria signed a memorandum of understanding to send up to 30 billion cubic feet/year of gas to Europe from Nigeria, via Niger and Algeria, commencing in 2015. 

"The project is ongoing in spite of the numerous challenges threatening to stall it," the agency quoted NNPC spokeswoman Tuminu Green as saying. 

"The Memorandum of Understanding between Nigeria and Algeria has been signed; a feasibility study for the project has been concluded and the process of laying pipes from Calabar [southeastern Nigeria] through Kano [in the north of the country] is about to begin." 

The project's cost is estimated at $10 billion for the pipeline and $3 billion for the gas-gathering centers. 

Green said cash-strapped NNPC, representing Nigeria's interest in the project, was exploring options to raise money from private investors to fund its share of the cost. 

Russia's Gazprom said last year that it was holding preliminary talks with Nigeria about participating in the project, but talks have not progressed since then. 

Industry analysts said the continued delay in the passage of Nigeria's oil sector reform law, the Petroleum Industry Bill, might have caught up with the gas pipeline project. 

"Like every other oil and gas project in Nigeria that is stalled because of the non passage of the PIB, the Trans Sahara project is also affected," an industry official told Platts Friday. 

Nigeria holds the world's seventh largest gas reserves, estimated at 185 trillion cubic feet. 

President Goodluck Jonathan told a summit of African Heads of State in Addis Abba, Ethiopia, on January 25 that Nigeria had set aside $400 million in the 2013 budget to commence preliminary work on the gas project.