With increasing oil and gas developments in Africa, regional pipeline systems play a huge part in improving access, availability and affordability of energy in the continent
As oil and gas industries continue to grow in Africa, the construction of regional, intra-African pipelines has a huge part to play in distributing these hydrocarbons across the continent, allowing Africa to reap the benefits of its energy resources. These benefits included improved access, availability and affordability of energy as well as energy security. It also contributes to added revenue to the participating countries and the skills development of local companies and individuals.
There are currently many pipeline projects underway in Africa. Among these are the Trans-Sahara Gas Pipeline (TSGP); the East African Crude Oil Pipeline (EACOP); and the Central African Pipeline System (CAPS).
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The TSGP, a natural gas pipeline currently under development, represents an estimated $13 billion investment. It is a tri-partnership with a combined shared value of 90% between the Nigerian National Petroleum Corporation – Nigeria’s national oil company (NOC) – and Algerian NOC Sonatrach. The Government of the Republic of Niger holds the remaining 10%. The pipeline will stretch approximately 4,128km, running from southern Nigeria through Niger to northern Algeria, with an annual capacity of 30 billion cubic meters of natural gas.
Meanwhile, the EACOP is a crude oil pipeline that spans borders and is presently in its planning and early implementation phase. It is owned by TotalEnergies (62%), China National Oil Corporation (CNOOC) (8%), Uganda National Pipeline Company (15%), and Tanzania Petroleum Development Corporation (15%). The pipeline’s route will extend from Uganda to Tanzania, covering approximately 1,443 km and will have the capacity to transport around 216,000 barrels per day. The estimated cost of the project is $3.5 billion.
CAPS is a comprehensive system that includes refineries, gas-to-power plants, liquefied natural gas (LNG) terminals and transnational oil and pipelines. A Memorandum of Understanding (MoU) was signed by seven countries, namely Burundi, Cameroon, Central African Republic, Chad, the Democratic Republic of the Congo, Equatorial Guinea, Gabon, the Republic of the Congo, and Rwanda, to initiate this project. The project is presently in its planning phase and will include three multinational pipeline systems that will simplify intra-African trade.
Meeting Regional Energy Demands
As the population of Africa continues to grow, the continent is facing challenges in meeting the energy demands of its regions – with over 600 million people currently without access to electricity. Currently, Africa’s oil and gas resources measure roughly 125.3 billion barrels of oil and over 600 trillion cubic feet of natural gas, the monetization of which will enable the continent to make energy poverty history by 2030.
Although Africa possesses abundant oil and gas resources, inadequate regional pipeline infrastructure and insufficient investment are impeding the transportation of oil and gas to needy areas, thereby restricting access, availability and affordability of energy sources across the continent. Investing in regional pipeline infrastructure could potentially reduce these challenges by providing direct access to countries in need.
Investing in regional pipeline infrastructure will not only enhance energy security but also stimulate economic growth, generate employment opportunities, enhance the knowledge base of local enterprises and empower communities in the energy industry. The TSGP, the EACOP and CAPS are all expected to produce thousands of high-paying employment opportunities for local companies which directly contributes to economic growth within the region.
“We recognize the reality of energy poverty and are committed to urging African suppliers to engage in joint ventures that will enable investments in regional oil and gas pipeline infrastructure, leading to mutual growth in achieving our shared goal of eradicating energy poverty by 2030. This endeavor will propel Africa to unprecedented heights of success and development,” said NJ Ayuk, the Executive Chairman of the AEC.