Rebel attacks swell Nigeria-to-Ghana pipeline cost

1286

Rebel attacks in Nigeria’s restive Niger Delta have boosted the cost of a natural gas pipeline to Ghana in which US oil major Chevron is a large stakeholder, a project official said yesterday.

“We have suffered delays due to many factors including damage to the pipeline as a result of the unrest in Niger Delta region,” Jack Derickson, managing director of the West African Gas Pipeline Company told reporters.

The cost of the 678 km (420 mile) pipeline originally scheduled for completion in 2007 to help ease chronic power shortages in Ghana, Benin and Togo increased nearly 50% to $900 million from $620 million, he said.

Rebels in Nigeria routinely targeted oil infrastructure in recent years, but an amnesty deal signed with the government earlier this year has halted attacks and brightened the outlook for the OPEC nation’s output.

Derickson said the pipeline project would be fully operational to deliver gas by March next year. The pipeline will have an initial capacity of 170 million cubic feet per day, according to the company’s Web site.
“The project is about 95 percent complete,” he said.

Chevron, the second-largest US oil company, owns a 36.7% stake in the West African Pipeline Company project.

Other shareholders include the Nigerian National Petroleum Corp. (NNPC), Shell Overseas Holding Co, Ghana’s Takoradi Power Co. Ltd., Societe Togolaise de Gaz, and Societe Beninoise de Gaz.



Ghana is reliant on hydroelectric power for most of its needs, and was hard-hit by a prolonged drought in 2006. Nigeria has a surplus of natural gas, produced as a by-product of its oil industry, much of which it burns off by flaring.