The West African Gas Pipeline (WAGP) will cost US$ 1 billion instead of the US$ 600 million earlier announced. This new cost is due to the apparent delay in the implementation of the project, which has seen costs soar by 70%.
This announcement was made by Deputy Minister of Energy, Emmanuel Armah-Kofi Buah, at a seminar organised by the West African Gas Pipeline Company (WAGPCo), in collaboration with the United States Aid for International Development (USAID) dubbed 'Off Shore Pipeline Protection'.
Implications of the cost increase
Buah has warned that the continued postponement of the completion date of the project may create a negative situation for customers who have taken the risk of guaranteeing the project. Both the West Africa Gas Pipeline Company and West Africa Gas Pipeline Authority (WAGPA) have been urged to assume their roles of technical and economic regulators of the pipeline, and also take steps to improve its management, while overseeing its speedy completion.
Buah said, 'It has become worrisome to hear of deliberate attempts by some groups, who, for some inexplicable reasons, use all sorts of means to sabotage gas transportation. These acts of vandalism pose a serious threat to the WAGPCo pipeline, which has not yet been gassed up.'
The West African Gas Pipeline (WAGP), is a 678 km pipeline from the gas reserves in Nigeria's Escravos region of Niger Delta area to Benin, Togo and Ghana. It is the first regional natural gas transmission system in sub-Saharan Africa, and will deliver natural gas from Nigeria to markets in Ghana, Benin and Togo.
Nigeria’s High Commissioner to Ghana, Senator Musilu Obanikoro has said the pipeline will soon be operational. Nigeria is one of the major stakeholders in the multi-million dollar project.
Benefits to Ghana
Ghana is expanding and diversifying its energy sources after experiencing a severe energy crisis in 1997 and 1998. The country will receive a tremendous boost in its industrial infrastructure and energy demand as a recipient of natural gas from Nigeria, through the West African Gas Pipeline (WAGP), which will deliver natural gas from Nigeria to markets in Ghana, Benin, and Togo.
Petroleum Resources Minister, Rilwanu Lukman, said the development in the gas sectors and major reserves has made the West African region one of the emerging suppliers of gas to the world market. “With the partnership of our neighbours, we are already well on the road to regional integration with projects like the West African Gas Pipeline (WAGP).
Project promoters claim that WAGP will reduce carbon emissions, provide cheaper, more reliable and environmentally friendly energy, and foster economic development and integration in Ghana, Togo, Benin and Nigeria. The project will make a major contribution to regional integration and economic development.
Mr Chirs Kpodo, Ghana’s Deputy Foreign Affairs Minister, said the WAGP project plays an important part in the collaboration between Ghana, Nigeria, Benin and Togo: 'The challenges that have been associated with the project have been of a great concern to the stakeholders and it is gratifying to note that efforts are underway to ensure that the project is fully operational within the shortest possible time.'