THE WEST AFRICAN GAS PIPELINE PROJECT(WAGP)
    
HEADS OF STATES OF GHANA, BENIN, NIGERIA, TOGO (GAS PIPELINE COUNTRIES), AND ECOWAS SECRETARY GENERAL
Project Objective:
Enable customers in Benin, Ghana and Togo to access Nigeria's immense resources of natural gas as fuel for power generation and industrial development.
Project Benefits:
-A source of cost-effective, secure, clean and reliable energy for West Africa Provides a foundation to facilitate regional economic growth and development Proves that economic integration can work for all.
-Provides an infrastructure to stimulate further foreign investment.
-Displaces liquid fuels in power generation and consequently contributes to reduction of emission of green house gases in the region.
-Contributes to overall Program of Gas Flare Reduction in Nigeria.
Project Developer
West African Gas Pipeline (WAGP) will be built, owned, and operated by the West African Gas Pipeline company Limited (WAPCo) under authority granted by the Governments of Benin, Ghana, Nigeria, and Togo.
WAPCo is owned by an Investment Consortium of six companies whose ownership entitlements are as follows:
Chevron Texaco West African gas Pipeline Ltd (36.7%); Nigerian National Petroleum Corporation (25.0%); Shell Overseas Holdings Limited (18.0%); VRA's Takoradi Power Company Ltd [Ghana] (16.3%); SoBeGaz (2%) and SoToGaz(2%).
Gas Supply
Initially, Natural Gas Producers in Western Niger Delta will supply natural gas for sale to WAGP's customers; Natural Gas, to be supplied through WAGP, will be processed Natural Gas stripped of impurities, solids, heavy hydrocarbons, liquids and water. It will be a very light and dry gas ideally suited as fuel for Power Plants and Industrial Customers. Supply will come from primarily associated natural gas with back up from non-associated natural gas sources in the Western Niger Delta. "Open Access" will occur such that anyone can supply or transport gas through WAGP after volume has exceeded 200MMscfd after 10 years, whichever occurs first.
However gas discoveries in Benin, Ghana and Togo will have immediate access.
Escravos-to-Lagos Gas Pipeline System (ELPS): Gas from producers will be transported to Alagbado Tee (northwest of Lagos) by utilizing the spare capacity in NNPC's existing ELPS.
West African Gas Pipeline(WAGP): WAGP will transport gas from Alagbado to delivery points in Cotonou, Lome, Tema & Takoradi.
Development Cost: approximately US$580 million
System Capacity:
Initial development: 200MMscfd
Ultimate: 450 MMscfd
Physical Facilities (preliminary):
Alagbado-to-Lagos Beach Compress Station, 30"×56km onshore pipeline
Lagos Beach
Initial 18,000 HP on-shore Compressor Station to Takoradi: 20"×569km off-shore pipeline in water depth ranging from 33-72 meters
Cotonou, Lome, Tema, Takoradi:
laterals to deliver gas to reduction and metering stations on-shore;
Classes of Customers
Foundation Customers, Standard customers and Industrial development Customers
Foundation Customers
Ghana's Volta River Authority/Takoradi Thermal Power Plant; CEB of Benin and Togo.
Gas Utilization
It is forecast that 85% of gas will be utilized in power generation and 15% will be utilized by local industry as form of heat energy of feed stock, (Potential Industrial Customers will belong to the following Sectors: Cement Production, Metallurgy [Aluminium, Iron/Steel etc.], Phosphate Plant; Wood Industry; Food/Beverage Industry; Powering Air Conditioners, Automobiles etc etc.)
Key Points of this Development
SHAREHOLDER FUNDED
WAPCo's funding plan is equity contributions by the pipeline Shareholders. Neither project finance nor multi-lateral agency finance will be involved.
COMMERCIAL PRINCIPLES
With the express agreement of the govermnments, the WAGP Project is being developed on commercial terms. This provides a sustainable project to the region. Commencement of construction hinges on successful finalisation of the key commercial agreements, which provide for an investor rate of return consistent with industry requirements in developing countries. WAPCo will be established as an arms-length commercial enterprise.
COMMITMENT TO HEALTH, SAFETY & ENVIRONMENT
WAPCo is commited to conducting its business in a socially responsible and ethical manner to ensure safety and protect health and the environment. WAPCo has prepared a 'world-class' environmental impact assessment (EIA) to international standards working cooperatively with host country regulatory agencies, and has had ongoing dialogue with the host countries' joint HSE working team to formulate appropriate, harmonised, cross-border approaches to the EIA. Public consultation on the draft EIA has now commenced.
Some Significant Project Development Milestones
1993 Bain & Cuneo study to conceptualize project
1995 Four states, Ghana, Togo, Benin, & Nigeria signed Heads of Agreement (HOA) for the supply of transmission National Sub provision of HOA include:"
- Independent consultant to carry out feasibly if variable then project developer to be appointed.
-Pipeline to be owned by Public - Private Partnership (with special provisions for citizens of the sub-region).
-Pipeline to be managed and operated on commercial basis.
-Pipeline to be regulated with 'Open Access' as well as common technical and fiscal regime
1996 Independent feasibility study undertaken Pipeline Engineering Gmbh of Germany is completed and concludes that WAGP is technically feasible and economically viable.
1999 The four states appointed a consortium of Public and private companies comprising the following as Project Developer.
- Ghana National Petroleum Corporation
- Nigeria National Petroleum Corporation.
- Societe Togolaise du Gaz
- Societe Beninoise du Gaz
- Chevron Nigeria Limited
-Shell Petroleum Development Company of Nigeria
2000 Inter-Governmental Agreement signed by the four States to facilitate the Pipeline development by harmonising their legal, regulatory and fiscal regimes.
2003
1. International Treaty among States signed
2. West African Pipeline company (WAPCo) formed
3. International Project Agreement between WAPCo and States signed.
2004 GROUND BREAKING CEREMONY
THE FIVE PHASES OF THE WEST AFRICAN GAS PIPELINE PROJECT
CONCEPTUAL PHASE
This was the pre-feasibility stage of the project when a study undertaken by Bain Cuneo e Associati showed the possiblity of the construction of a gas Pipeline from Nigeria, Benin, Togo and Ghana was signed to initiate the West African Gas Pipeline Project (WAGP).
FEASIBILITY PHASE
The current Commercial Group (Sponsors) invested in an Engineering Feasibility Study (EFS) that established the commercial and technical viability of the project. The Commercial Group hassince been designated Project Developer.
DEFINITIONAL PHASE
This is the current stage of the Project where the Project Developer intends to fine-tune the feasibility study findings, reach agreement with the governments that will facilitate the WAGP in order to make the Final Investment Decision.
CONSTRUCTION PHASE
This is the next phase of the project after the final investment decision has been made. The Project Developer will engineer, procure and construct the pipeline.
OPERATION PHASE
This is the final phase of the project when the pipeline commences its thirty-year life.
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