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Nigeria revives plans for Sahara gas pipeline

Nigeria is reviving an old notion of piping its gas across the Sahara ...

Nigeria is reviving an old notion of piping its gas across the Sahara for shipment to Europe, claiming that its domestic network plans and higher world prices have changed the economics of the project.

Rilwanu Lukman, Nigeria's presidential adviser, said last week he had agreed with Algeria to "dust off" and update an earlier feasibility study to pipe gas to Algeria for onward shipment to Europe. Chekib Khelil, Algeria's oil minister, confirmed the study.

Mr Lukman also said that, in its dash for gas, Nigeria was discussing with Phillips of the US and Agip of Italy the possibility of a third liquefied natural gas (LNG) plant for the country before it had even finalised negotiations with another consortium for a second plant.

Mr Lukman, in London for a Nigerian oil and gas conference last Friday, said "the economics of the whole shooting match have changed, because prices are higher and in any case we plan to take the gas north through Nigeria and to use it industrially". The present pipeline stops at the Ajaokuta steel plant, but Mr Lukman said the idea was to take it north through Abuja, the capital, to Kano and on through Niger to Algeria.

Senator A.M. Pepple, chairman of the Nigerian Senate committee on gas, told the conference, organised by the CWC group, that the gas would be used not only for the power sector which consumes 86 per cent of domestic gas, but also for the cement and fertiliser sectors.

Mr Lukman expressed confidence that there would be a market for more Nigerian gas, which is low in sulphur, in Europe as well as in north and south America. He acknowledged that gas pipelines and LNG plants, which cost around $1.5bn each, are expensive, but said "if the market is guaranteed, finance will not be a problem".

Industry observers noted that Nigerian gas would have to travel at least 2,000km across the Sahara before competing with Algerian gas for the European market