Thursday, November 8, 2001

Algeria and Nigeria, two of Africa’s top energy producers, recently began talks on the development of a trans-Saharan gas pipeline. Several factors will limit the project’s short-term feasibility. But the two countries may capitalize on the talks to expand more important political cooperation aimed at securing positions as future regional leaders.
Twelve-hundred miles through the heart of the great Sahara desert is not an easily traversed distance, yet that is the length natural gas from Nigeria’s southern Delta region would have to travel to reach Algeria’s pipeline network. Plans for a trans-Saharan gas pipeline lurched forward last month, when the governments of Algeria and Nigeria signed a memorandum laying the groundwork for negotiations.
The global economic slowdown and drop in energy prices will limit the pipeline’s feasibility for the foreseeable future. But the talks could pave the way for a new era in Algerian-Nigerian cooperation and could herald the emergence of a new geopolitical alignment that would impact the entire continent.
Algeria and Nigeria, both members of the Organization of the Petroleum Exporting Countries, are two of Africa’s top energy producers, as well as key suppliers to the West. Nigeria is one of the top-five suppliers of crude oil to the United States, and Algeria provides a significant portion of Europe’s natural gas. Nigeria has 124 trillion cubic feet of proven natural gas, while Algeria has 159.7 trillion cubic feet.
Previous talks about a joint pipeline project fizzled. But a new plan for Africa’s economic development and the growing European demand for natural gas are now motivating fresh negotiations.
The recently signed agreement clears the way for the two countries to share confidential information on the project. A feasibility study to determine the pipeline’s viability, including production costs, infrastructure requirements and routes is already in the works, the Lagos daily Guardian reported Oct. 1.
The pipeline would move gas from Nigeria’s Delta region to the capital, Abuja, then on to the city of Kano, where the industrialized north would have access, according to Nigeria’s presidential adviser and former OPEC secretary-general, Alhaji Rilwanu Lukman.
The route would then cross into the country of Niger, along Nigeria’s northern border, and then through the Sahara to connect with Algeria’s pipeline grid. From there, it would travel onto Europe’s burgeoning natural-gas market, Alexander’s Gas and Oil Connection reported on April 30.
The project is still in its earliest stages, and isn’t likely to go much further until world energy prices rise again. And even when the deals are signed, financing and construction will take years.
In the meantime, though, the continuing discussions provide a platform for the more vital issue of closer cooperation between Nigeria and Algeria. Both countries have a growing number of economic and geopolitical reasons for closer links, and are already discussing building a road and laying a fiber-optics telecommunications cable to connect their countries, Cairo’s Arab Finance magazine reported Sept. 5.
The governments hope to capitalize on closer ties to expand their own economies and secure their positions as regional leaders. Nigeria for one is eager to tap into the growing European demand for natural gas.
Consumption in Western Europe alone is projected to double from 14 trillion cubic feet in 1999 to 28.4 trillion by 2020, according to the U.S. Department of Energy’s Energy Information Administration.
The Nigerian government is already taking pains to expand its natural-gas capacity and exploit that market. This year Abuja initiated plans to build a third liquefied natural-gas refinery and is seeking export possibilities, the Lagos publication Nigerian Oil and Gas Online reported Sept. 7.
Algeria is also seeking to advance its regional position by developing its economy. The government is entangled in a drawn-out civil war with Islamic guerrillas; becoming a transit state for Nigerian gas could provide a substantial source of revenue to shore up its economy and battle the threat. It could also cement Algeria’s position in the New African Initiative backed by Nigeria and South Africa.
The plan calls for African governments to take responsibility for the continent’s economic and political development with reliance on interregional cooperation and economic expansion and some assistance from the developed world.
A key aspect of the initiative encourages the rise of regional powers such as South Africa, Nigeria and Algeria to drive development.
South Africa is already the economic powerhouse of southern Africa and hopes to expand its political clout through the initiative. Nigeria’s 120 million people and a well-developed economy position it as the regional economic leader in West Africa.
But Algeria faces stiff competition in North Africa from both Morocco and Tunisia, which have stronger economies and, more important, domestic stability. Algiers already enjoys strong ties with Pretoria, since it is one of South Africa’s arms markets. Coordination with Nigeria would complete the triad, with each nation positioning itself as a regional anchor.
Transferring gas 1,200 miles across the Sahara may still be a pipe dream, but it offers an appetizing and ultimately realistic economic incentive needed to bring about the future tripartite division of Africa envisioned by the New African Initiative.
Miss Etheridge is an analyst with Stratfor in Austin, Texas, a provider of global intelligence to private companies and subscribers. Its Web site is

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