Chevron Begins Installation of the West African Gas Pipeline

West Africa Pipeline
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Chevron reports the West African Gas Pipeline Company Limited (WAPCo) has commenced installation of the 353-mile (569-kilometer) main offshore segment of the West African Gas Pipeline (WAGP). Chevron, through its affiliate company, the Chevron West African Gas Pipeline Ltd., is a 38 percent shareholder in WAPCo.

Commenting on the importance of the start of pipeline installation, John Watson, president of Chevron International Exploration and Production said, "This event represents a significant achievement for the WAGP shareholders and is testimony to the strong commitment of the governments of Benin, Ghana, Nigeria and Togo to make this project a reality. The project not only aligns with Chevron's overall gas integration and commercialization strategy, but will also lead to regional economic development by providing a supply of clean and lower cost energy to growing markets." Watson further noted that when complete, the estimated $590 million project will be the first regional natural gas transmission system to have been developed in sub-Saharan Africa. First gas delivery is scheduled for December 2006.

The offshore route of the 475 million cubic feet per day capacity pipeline will be parallel to the coastline, approximately 9 to 12 miles (15 to 20 kilometers) offshore in water depths of between 98 and 246 feet (30 and 75 meters). Pipe will be laid using the lay barge, "Sea Horizon," which can weld and lay the concrete-coated pipes at an average rate of one-to-two miles (two-to-three kilometers) per day.

Jay Pryor, managing director of Chevron's Nigeria/Mid-Africa Business Unit, said, "Natural gas flare reduction is a key business driver for the company and the West African Gas Pipeline is one of several projects we have in Nigeria to eliminate the practice of routine associated gas flaring in our areas of operation. According to expert analysis, it is estimated that when fully operational, the pipeline could reduce green house gas emissions by as much as 86 million tonnes over the next 20 years through flare reduction and changing to a cleaner-burning fuel."

When the offshore section is completed, it will be connected to a new onshore pipeline and compressor station in Nigeria and the entire 420-mile (678 kilometer) pipeline will link the Volta River Authority's power plant at Takoradi, Ghana to Nigerian natural gas from an existing pipeline located near the city of Lagos.

In addition to the delivery point at Takoradi, there will be other onshore delivery points, including regulating and metering/custody transfer stations at Tema in Ghana; Lome in Togo; and Cotonou in Benin. Construction of facilities for these additional delivery locations will commence in January 2006.

Shareholders of WAPCo, the pipeline owner and operator, include Chevron's affiliate company, Chevron West African Gas Pipeline Ltd. which holds the largest interest in the company at 38 percent, followed by the Nigerian National Petroleum Corporation (25 percent), Shell Overseas Holdings Limited (17 percent), Takoradi Power Company Limited (16 percent), Societe Togoliase de Gaz (2 percent) and Societe Bengaz S.A. (2 percent).

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