West African Gas Pipeline

Both public and private sector companies are collaborating in a limited liability company known as the West African Gas Pipeline Company (WAPCo) to construct and operate the pipeline.

The 678 km, $US635 million pipeline will extend from the existing Escravos-Lagos pipeline at the Alagbado “˜Tee’ in Nigeria and proceed to a beachhead in Lagos and from there offshore to Takoradi, in Ghana, with gas delivery laterals from the main line extending to Cotonou (Benin), Lome (Togo) and Tema (Ghana).

The Escravos-Lagos pipeline system has a capacity of 800 MMcf/d, and the WAPCo system will initially carry a volume of 170 MMcf/d and peak over time at a capacity of 470 MMcf/d.

The preliminary physical facilities include a 30 inch, 56 km onshore pipeline from Alagbado, connecting to a 20,000 HP onshore compressor station at Lagos Beach. From Lagos Beach, a 20 inch, 569 km offshore pipeline will extend to Takoradi in water depths of 33 – 75 metres.

Western Niger Delta gas producers will supply natural gas for sale to WAPCo’s customers. It was forecast that 85 per cent of gas would be utilised in power generation and 15 per cent would be utilised by local industry.

As a source of lower-cost sustainable fuel for power generation and direct use for industrial and commercial customers, WAPCo has said that the pipeline fosters an enabling environment for economic development and job creation in the sub-region.

In Benin, Togo and Ghana, the substitution of cleaner burning natural gas for traditionally less desirable fuels such as crude oil, charcoal, and diesel will reduce air pollution and provide health benefits, bringing improvements in the quality of life for citizens. It is expected that availability of natural gas in Togo, Benin and Ghana will help stimulate economic growth and attract additional investments. In Nigeria, the provision of a market and financial returns for natural gas that may otherwise have been flared will have a positive impact on the economy as well as the environment.

The Heads of States of Benin, Togo, Ghana and Nigeria, under the auspices of the Economic Community of West African States, signed the Heads of Agreement establishing the framework under which the project could proceed. As a result of the trans-national character of the project which unites two languages and a multiplicity of stakeholders with diverse cultural and institutional backgrounds, comprehensive negotiations were held to harmonise and integrate fiscal, regulatory and legal frameworks for successful pipeline construction and operations.

Several local environmental groups in Ghana, Nigeria, and Togo have opposed the WAGP project, with Friends of the Earth-Ghana arguing that environmental impact assessments of the project were not given sufficient priority in feasibility studies.

The World Bank has estimated that Benin, Togo and Ghana can save nearly $US500 million in energy costs over a 20-year period as WAGP-supplied gas is substituted for more expensive fuels in power generation. Ghana will significant savings by switching over to use natural gas from the WAGP to run its power plants. NGas, the shipper of WAGP natural gas for Chevron, NNPC and Shell gas producers, has signed agreements to supply natural gas, via the WAGP, to a 550 MW power plant in Takoradi, Ghana, as well as a 25 MW power plant each in Togo and Benin, and other power plants proposed in the three countries.

WAPCo was formed in May 2003, with Front End Engineering and Design (FEED) undertaken in October that year. A final draft Environmental Impact Assessment was submitted to Benin Togo, Ghana, and Nigeria, as well as to the World Bank, OPIC, and MIGA in January 2004. Construction commenced in 2005, and the offshore segment has been completed. Onshore pipeline and infrastructure work is currently in progress and operational start-up is scheduled during the first half of 2008.

WAPCo is owned by: ChevronTexaco West African Gas Pipeline Ltd
(36.7 per cent); Nigerian National Petroleum Corporation (25 per cent); Shell Overseas Holdings Limited (18 per cent); and Takoradi Power Company Limited (16.3 per cent), Societe Togoliase de Gaz (2 per cent) and Societe BenGaz S.A. (2 per cent).

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