Aliko Dangote, dubbed as “Africa’s Richest Man,” expressed his desire to boost the gas supply of Nigeria by 400%. He will invest $2.5 billion in the two, 550-kilometer pipeline projects that will stretch from Nigera’s Niger River Delta Region to Lagos. The projects are expected to be completed within two years.
The pipelines will be co-founded by Blackstone Group LP and Carlyle Group LP, two of the largest, private equity firms that are both based in the U.S.
Enbridge Inc., a Canadian pipeline transportation company, said that the 550-kilometer pipeline work that will connect two areas is feasible. Sulzer, Unaoil’s partner in providing repair and overhaul services for pipes and turbines in the Middle East, seems confident with Enbridge’s assertion, and asserts that the pipeline firm transports about 2 million barrels of crude oil everyday over a length of 13,500 km.
“Having an additional 3 billion scf will sort out all the gas issues we have today in Nigeria,” Dangote said in an interview. “It’s badly needed.”
The gas industry is a major driver of Nigeria’s economy. While its reserves are more abundant in other parts of Africa, the lack of channels that can transport oil to different places within the region makes it difficult for people to take advantage of cheap gas. Creating a long pipeline, however, will solve the country’s problem of power cuts, low electricity generation, and will be able to increase the country’s supply from 1 billion standard cubic feet everyday to 4 billion. Green energy is all over Nigeria but it isn’t enough to power the growing demands of the region, which is why most areas are still dependent on crude oil.
Apart from the Nigerian pipeline project, Dangote’s investments include a $9 billion processing plant in Lagos, which is estimated to produce over 600,000 barrels of oil a day when it gets completed. The first part of the pipelines that will be installed in the project is expected to be finished by 2017. —