EU and Russia in scramble for Nigerian gas

The European Commission stepped up its quest to diversify the EU’s energy supplies on Wednesday (17 September), offering financial and political support for a €15 billion trans-Saharan pipeline to carry natural gas from Nigeria to European markets.

The move comes after Gazprom, the Russia energy giant, signed a memorandum of understanding with the Nigerian National Petroleum Corporation in Moscow last week to co-operate on gas exploration, production and transportation, according to press reports.

The simultaneous moves by Brussels and Moscow illustrate the scramble for natural resources as continued growth in the global economy fuels ever-increasing demand for energy.

Nigeria “could be an important partner in EU’s diversification efforts,” said Ferran Tarradellas, spokesperson for EU Energy Commissioner Andris Piebalgs, who was in Nigeria last week.

“They have shown great interest in the project,” Tarradellas told EURACTIV, especially because the pipeline would help Nigeria deliver gas to its domestic market via a 1,050 km stretch running across its territory. Sonatrach, the Algerian state-owned energy group, is also understood to strongly support the pipeline.

However, Tarradellas said it was “too early” to make any formal budgetary commitments at this stage, adding that the European Commission had “means to finance feasibility studies” but not entire projects. The European Investment Bank could help finance construction but money would have to come mainly from the private sector, he explained. European oil companies, including Shell, Total, and ENI, “have made significant investments in Nigeria and are likely to invest more,” he added.

The planned 4,300 km pipeline would stretch across Nigeria, Niger and Algeria, where gas would be shipped to Spain and Italy via the Medgaz and Galsi pipelines currently being developed or under construction. Its capacity would range from 20 billion cubic metres of gas per year (bcm/y) in 2015 and scaled up to 30bcm/y in 2030, according to a first project outline. According to the plan, construction would start in 2011, with the first gas expected to be delivered in 2015.

Tarradellas rejected suggestions that Gazprom’s participation would create problems for the EU. “ExxonMobil is in Nigeria too and that does not pose us any problems,” he said, adding that Gazprom was also seeking to diversify its supplies. “If Gazprom makes investments, they are free to do it, I don’t see why this should pose us a problem.” “Gas is a commodity that needs to be regulated by market rules.”

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