Page last updated at 14:47 GMT, Friday, 3 July 2009 15:47 UK

Sahara gas pipeline gets go-ahead


Nigeria, Niger and Algeria have signed an agreement to build a multi-billion dollar pipeline to take Nigerian gas across the Sahara to the Mediterranean.

The giant project, which will cost an estimated $13bn (£8bn), aims to deliver up to 30 billion cubic metres of gas per year for the European market.

France's Total, Anglo-Dutch firm Shell, and Russia's Gazprom have all expressed an interest in investing in the scheme.

The pipeline will run for 2,580 miles (4,128km) through the three countries.

BBC Africa analyst Richard Hamilton says that when built, it will be one of the great feats of engineering in the world and dwarf several existing pipelines, such as the one beneath the North Sea.

He says one concern is security, as a pipeline could be a target for Tuareg rebels or al-Qaeda in North Africa, both of whom are active among the unpatrolled expanses and porous borders of the Sahara.

Russian concerns

Energy analysts say there has been interest in this project for many years, but lack of investment and an unclear regulatory environment in Nigeria meant that the plans stayed firmly on the drawing board.

Algerian Energy Minister Chakib Khelil
Algeria's energy minister says funding will not be a problem

European Union nations now hope it will enable them to diversify their gas supplies - and most pressingly, reduce their reliance upon Russian gas - but many analysts say Gazprom may have a head start in participating in the scheme.

This is because only last week, Gazprom signed a separate $2.5bn deal with Nigeria's state-owned gas firm NNPC to build new gas refineries, pipelines and power stations in Nigeria.

European Union states are keen to reduce their reliance upon Russian gas because of Gazprom's numerous price disputes in recent years with Ukraine.

These rows have seen Gazprom temporarily cut supplies to Ukraine, which in turn has reduced Russian gas deliveries to western Europe that are piped through Russia's neighbour.

"We have the expertise and I don't think there is a problem with finance in this project," said Algerian Energy Minister Chakib Khelil.

Nigeria has estimated natural gas reserves of 180 trillion cubic feet, the seventh-largest in the world.

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