After months of negotiations, Algeria, Niger and Nigeria signed a memorandum of understanding over the summer formalizing the 4,000km Trans-Sahara Gas Pipeline (TSGP) project that would bring Nigerian gas through pipelines to Europe.
“This agreement marks the commitment of the three parties to revive a project of regional and international scope that will contribute to the social and economic development of our country,” said Algerian Energy Minister Mohammed Arkab shortly after signing the agreement along with his counterparts from Niger and Nigeria.
For now, it’s just an agreement backed by “strong political will,” Middle East Eye told the publication. Abdelmajid Attarformer Algerian energy minister and ex-CEO of Algerian oil and gas giant Sonatrach.
Meanwhile, an Algerian energy ministry spokesman told MEE on condition of anonymity that “discussions will continue between experts from the three countries.”
Theoretically, the project involves the construction of a pipeline to transport gas from the Niger Delta to In Salah, in southern Algeria.
From a base in Hassi R’Mel, in the north of the Sahara, almost 30 billion cubic meters of gas could be sent to Europe through three existing gas pipelines: Transmed, which links Algeria to Italy via Tunisia; Medgaz, supplying Spain from the west of Algeria; and the Maghreb-Europe gas pipeline passing through Morocco, connecting Algeria and Spain.
The construction of the Maghreb-Europe gas pipeline has been suspended since October 2021, when, after the severance of diplomatic relations between the neighboring countries of the Maghreb, Algeria decided not to renew the contract it concluded with Morocco.
Without setting a date, the three ministers spoke of completing the ambitious project “as soon as possible”. Experts say the pipeline could be completed in three years “if we move forward,” Attar said. According to the former minister, if greater urgency is required, the time frame can be reduced.
“In the 90s, we built a gas pipeline that linked Algeria and Morocco in less than two years,” the former head of the Algerian oil and gas giant said, pointing out that building a trans-Saharan project could be just as fast.
For this to happen, progress on financial issues must be made. Although Algeria and Nigeria, which together own 90 percent of the company responsible for building the pipeline, may have enough money to complete the respective parts of the project, Niger is too poor to participate in the program, which is estimated to cost more than $10 billion. This forces countries like Algeria to look for external funding, in particular from China.
Algerian ministry sources cite some potential for European funding as these countries are actively looking for alternatives to Russian gas. “European countries would like the project to be up and running within a maximum of two years,” said a former chief executive of Sonatrach, Algeria’s national state oil company, who spoke to MEE on condition of anonymity.
The Trans-Sahara gas pipeline project is not a new idea. Algeria first raised this issue with Nigeria in 2002, then with Niger. Since then, Nigeria has reaffirmed on several occasions its willingness to supply gas via trans-African pipelines to European markets, which is currently supplied by more expensive gas carriers.
The consultations were held without tangible results. Then, in 2016, the king Muhammad VI proposed to lay a pipeline through Morocco.
During his visit to Abuja, the king expressed his hope that this project would benefit all the countries of West Africa. But such a project would require at least $30 billion and take about 10 years to complete. The project never got off the ground.
According to experts, the delay characteristic of the trans-Saharan project is inextricably linked with the price of gas. Until 2019, the price of a cubic meter of gas in the spot markets made it an “uninteresting and unprofitable” business, Attar told MEE.
The conflict in Ukraine has changed all that. As European countries look for gas suppliers outside of Russia, TSGP has begun to look attractive and profitable.
The possible launch of the TSGP project “comes at a unique time both in terms of the geopolitical landscape and energy markets, characterized by high demand for gas and oil and stagnant supply caused by falling investment, especially in oil and gas exploration, since 2015” said Minister of Energy Arkab.
Algeria, which currently exports nearly 56 billion cubic meters of gas a year, will initially only be a transit country for TSGP, but it will “benefit from transit,” Attar said.
In addition to these advantages, if the project is completed, Algeria will receive political dividends by strengthening its strategic position on the African continent. “Algeria must find a good place for itself in Africa and not be left behind,” the President said. Abdelmajid Tebbun in a TV interview. He described the proposed pipeline as a “major African project”.
According to Attar, the project is also “extremely important at the trans-African level” as it will bring African countries closer and strengthen ties with Niger, Nigeria and Burkina Faso, “a country with scarce resources that will benefit from this project.”
Nigeria has the largest gas reserves in Africa with about 5.5 trillion cubic meters (30 percent of the continent’s total), followed by Algeria with 4.5 trillion cubic meters (25 percent of production).
In 2020, the two countries accounted for 86 percent of African gas exports, 58 percent from Algeria, which has the continent’s largest gas pipeline network, and 28 percent from Nigeria. More than 62 percent of these exports are destined for Europe, according to data provided by the New South Policy Center.
Author: Ali Bouklef – Ali Bouklef was a political journalist in Algeria for about twenty years. After working for El Watan, The Tribune and The Kabylie’s Departement, he currently works for the French-language daily Liberté. He is also a consultant for foreign TV channels.
Translation by Sergei Dukhanov