Optimising fleeting opportunities with energy supply to Europe

Sunny Nwachukwu (Loyal Sigmite), PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on  +234 803 318 2105 (text only) or schubltd@yahoo.com

Any plan by Nigeria’s federal government and the country’s oil and gas industry targeting a gas pipeline project to Europe for that region’s high energy demand would have to be achieved either by reviving the near-comatose Trans-Saharan Gas Pipeline Project (originally initiated in the 1970s, and later followed up with a Memorandum of Understanding (MoU) in 2005 between Nigeria’s NNPC and Algeria’s Sonatrach; with a subsequent feasibility study done by Penspen Limited in 2006, which found it to be technically and economically feasible and reliable), or through some form of partnership arrangement, as the newly established NNPC Limited may opt for, where the company could directly interface with any interested team of investors in the nation’s energy industry, as it could be linked to the ongoing Ajaokuta – Kaduna – Kano (AKK) gas pipeline project, which has Ajaokuta as it’s starting point. This is especially more so now that the attractive European energy market offers great opportunities for new suppliers of natural gas to competitively penetrate the high end European energy market.

The gas pipeline ‘project-restart’ by Nigeria, Niger and Algeria, with the $13 billion “Declaration of Niamey” signed on 16th February 2022 (exactly eight days before the invasion of Ukraine on 24th February by the Russian soldiers), through their respective ministers, at the 3rd edition of ECOWAS Mining and Petroleum Forum (ECOMOF), was indeed, a visionary and wonderful economic move. Its tripartite intergovernmental arrangement, and the eventual Joint Venture agreement that followed, actually started with a draft of an MoU, (agreed upon by NNPC and Sonatrach on 20th February 2009), and duly signed by the three countries’ energy ministers on 3rd July 2009 in Abuja on natural gas exports from the three African countries to Europe. That demonstrated strategic move was for a great opportunity to penetrate and diversify the European Union’s gas supplies market, although the heightened regional insecurity (safety concerns) destabilised operations, including the terrorist incidence of 2013 within its operational frontiers.

Logistically, the project route, Nigeria – Niger – Algeria, starts from Warri area, to run a distance of 1,037 kilometres to Niger Republic, and then runs 841 kilometres in Niger, and finally, runs another 2,310 kilometres to Hassi R’mel in Algeria; making a total pipeline length that covers a distance of 4,188 kilometres. The gas transmission from Algeria’s Mediterranean coast connects the existing Trans-Mediterranean, Maghreb – Europe, Medgaz and Galsi pipelines into the European energy market. This project is so attractive that many international oil companies that indicated interest (including Russia’s Gazprom, among others) had long negotiated with Nigeria about their possibility to participate.

With the ongoing international politics relating to the Ukrainian invasion by the Russian military, and the corresponding numerous sanctions with trade restrictions being dished out against Russia by the West, vis-à-vis its economic implications on trans-border movements of mercantile goods and consumables (especially on energy exports to Europe), the ‘global green solutions’ (GGS) through the ongoing global energy transition programmes, calls for quick strategic action by the national oil company and or the Ministry of Petroleum Resources, to actively capitalise on this attractive market opportunity at hand; for an optimal economic efficiency the European energy market offers for exploitation with the available capital stock of the nation’s abundant fossil energy/gas reserves (liquefied natural gas), that shall generate the billions of dollars the concerned African economies could earn, before the timeline for the global energy transition elapses (between 2030 – 2060).

This fleeting opportunity that has opened up in the nation’s energy treasure needs not to be wasted, especially when the natural gas is to a great extent, characteristically classified as a “clean energy” resource. While the pursuit of total energy transition to renewable is on, may this “pound of flesh” in natural gas be maximally “cut”, and fully exploited for its full benefits and maximal economic gains, in favour of the gas producing nation(s), while still staying within the world’s environmental acceptable timeline to exit fossil fuels resources.

Energy is a critical aspect of life’s maintenance. This actually makes both the political discussions and the economics very important issues for virtually every economy in the world because, without the proper energy solutions management, life’s existence and sustainability will definitely be challenged. The GGS by energy experts is, therefore, an assignment that has to be innovatively actualised for every activity on earth to be sustained without a break at any point in time. This makes energy business an essential vocation for mankind, because life must go on. The NNPC Limited is, therefore, passionately urged to proactively demonstrate entrepreneurial excellence in its business performances, while rendering this all important energy supply service, as well as growing the economy through the pecuniary returns made thereof, for the general good of the society and particularly, the citizenry in the current democratic setting and economic dispensation.