Leveraging Regional Pipeline Systems to Improve Energy Security in Africa

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Under a mandate to make energy poverty history by 2030, African Energy Week hosted a panel discussion that explored the numerous pipeline projects currently underway in Africa.

A number of major pipeline projects are currently underway across the African continent that are set to significantly improve energy security through intra-African connections. As these developments start to come online, opportunities to un-strand oil and gas assets and drive socioeconomic growth have emerged. During African Energy Week (AEW) 2022, a discussion took place on ‘Connecting the Dots: Major pipeline projects are redrawing Africa’s oil and gas map,’ led by industry experts and movers and shakers from across the continent’s midstream sector.

Panel speakers included Samia Massout, General Director of Hydrocarbons, Ministry of Energy and Mines of Algeria; Tom Griffin, EMEA Partner, Control Risks; Joseph Medou, General Director, Senegal Gas Network; Ibrahim Mamane, CEO, SONIDEP; and Proscovia Nabbanja, CEO, Uganda National Oil Company. The panel was moderated by Anibor Kragha, Executive Secretary, African Refiners and Distributors Association.

Projects such as the Trans-Sahara Gas Pipeline (TSGP); the West African Pipeline; the East African Crude Oil Pipeline (EACOP); the Lamu Port-South Sudan-Ethiopia-Transport; the Angola-Zambia Pipeline and the many more currently underway promise a new era of regional integration in Africa.

Providing insight into the planned TSGP, Massout stated that, “Algeria, Nigeria and Niger are convinced of the importance of this project and the positive impact it will have on socioeconomic development. We have had three meetings, the first took place in Niger in 2022 to reactivate the project. After this, there was a common Memorandum of Understanding (MoU) that the three parties signed for reactivating the project. The second meeting took place on June 22 in Nigeria for the launch of a new phase of the project and the putting in place of a champion committee that has the task of coordinating the project. The third meeting took place in Algeria and we came up with a new group to make sure the project is finalized.”

Expanding on the discussion on the pipeline, Mamane provided insight into its significance for Niger, adding that, “We are not yet a gas producing country, and have a small refinery of 2,000 barrels which meets domestic demand. The pipeline project from Algeria to Nigeria has already been built in the Niger part up to the border of Nigeria and there is already a committee set up to champion that. Niger is a desert and our consumption is 80% biomass – this means that trees that are cut in a country that is three quarters desert has impacts on agriculture and causes the deserts to progress. By using gas, we will stop the cutting of the wood, and it will enable us to render our fields more fertile and prevent shortages that will reoccur every three of four years. So, this pipeline will be an immeasurable contribution to us.”

As this project and the many more underway take off, Africa is set to be well positioned to ensure energy security on the back of regional midstream infrastructure projects. In line with this, Nabbanja provided insight into the EACOP, stating that, “The technical planning has put environmental considerations at the forefront and we have had a comprehensive environmental assessment. From the environmental perspective, everything has been put in place to cater for the environment. When you look at the financing, it is risk versus reward. The intent is to curb emissions, not curb development. We will not compromise on the industrialization agenda for the country. Financing will be an issue, but as long as we can show that we are doing everything possible to reduce emissions but not compromise on the socioeconomic good, we are still bankable.”

Meanwhile, Medou emphasized the pipeline network Senegal has a stake in – the Nigeria-Morocco Pipeline System – stating that, “We have a stake in this pipeline. We know that we have a lot of challenges but last week we signed the MoU with Nigeria, Morocco and Mauritania to launch phase one of the pipeline. This MoU will allow us to launch a study and also finalize the final route in Senegal of the gas pipeline network. Another challenge we have is the start of commercial discussions. We are working on setting up a joint company that will manage the commercial aspect of the pipeline.”

The conversation then shifted to financing these projects, with Griffin stating that, “There have been heightened concerns around ESG for these projects. The agitated environment groups have scared off some of the big financing and international financing. All of these projects are bankable but you need to take risk management at the top of your decision making. Whether it is domestic, trans-national or regional, clients ask key considerations. The first is around political risk; the second is around the regulatory environment; and the third is security. One of the things we do is assess the risks and rewards of projects of this nature. If you marry these two together, you get a sense of comfort within the financing elements.”

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