BAKU, Azerbaijan, Sept.22
By Leman Zeynalova – Trend:
The emergence of a more flexible liquified natural gas (LNG) market and increased LNG supply competition has reduced drastically the attractiveness of cross-border gas pipeline projects in some regions or sub-regions where political, commercial, and non-commercial risks are too challenging to manage and mitigate, Trend reports with reference to the Oxford Institute for Energy Studies (OIES).
OIES notes in its recent report that in the MENA region, the Arab Gas Pipeline (AGP) inaugurated in 2003 and initially planned to supply Egyptian gas mainly to Jordan, with pipeline extensions to other Middle Eastern countries, is presently operating at a fraction of its gas transmission capacity.
“The AGP was idle for a long period of time because of a previous severe shortage of gas in Egypt. This pushed Jordan to develop an LNG import project to meet its gas needs. In the Gulf Cooperation Council (GCC) area, the Dolphin Energy gas pipeline commissioned in 2007 supplies Qatari gas to the UAE and Oman. Despite the location of Qatar’s huge natural gas reserves being a short distance from all GCC countries, this cross-border gas pipeline is still operating below its potential capacity, whilst in neighbouring Kuwait, one of the world’s largest LNG import terminals is being developed. Thus, Kuwait will continue to receive Qatari LNG5 rather than Qatari pipeline gas.”
OIES analysts point out that in Sub-Saharan Africa, the West African Gas Pipeline (WAGP) commissioned in 2009 to supply Nigerian gas mainly to Ghana, with small volumes allocated to Benin and Togo, has never been able to meet the full contractual volume of gas to Ghana because of Nigeria’s failure to supply. “Although Ghana has developed its own indigenous gas supplies and gas imports through the WAGP have recently increased, it has nevertheless developed a new LNG import project. Whether Ghana needs this LNG import project or not is a different debate.”
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