press release

Chevron Press Release - Chevron Named Project Manager For West African Gas Pipeline Project

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ABUJA, NIGERIA, Aug. 16, 1999 -- In a joint venture agreement signed here today, Chevron has been appointed project manager for one of West Africa's most significant regional energy projects, the West African Gas Pipeline (WAGP).

The joint venture agreement establishes a consortium of six energy resource companies to develop the West African Gas Pipeline, outlines the corporate structure of the joint venture, and establishes a program to expedite the technical and commercial activities required to complete pipeline development by 2002. The consortium and the governments of Benin, Ghana, Nigeria, and Togo signed a Memorandum of Understanding on Aug. 11, granting development rights to the consortium.

"The signing of the joint venture agreement is the first step required of the consortium under last week's accord with the governments," said George Kirkland, chairman and managing director of Chevron Nigeria Ltd. "Chevron is immediately mobilizing the people required to fast-track this vital project."

As announced on Aug. 11, the pipeline is expected to cost approximately (U.S.) $400 million and to initially ship about 120 million cubic feet per day of Nigerian for sale to power generation customers in Ghana, Togo and Benin. In addition to delivering much needed energy to this part of the African continent, it is envisioned that the project will significantly contribute to the economies of the participating nations through the creation of jobs and low-cost fuel for new industrial and commercial development ventures. Responding to these new demands, the volumes may double or triple over the life of the project.

The West African Gas Pipeline project will reduce greenhouse gas emissions by cutting down on flaring associated with existing oil production in Nigeria. Air pollutants will be further reduced because natural gas will replace the use of fuels that are less "friendly" to the environment in power generation and industrial production. "The WAGP project dovetails perfectly with Chevron's phased development of its Escravos Gas Project, and embodies our commitment to commercialize the vast natural gas resources of Nigeria," Kirkland concluded.

The participants in the development consortium are: Chevron Nigeria Ltd.; Ghana National Petroleum Corp.; Nigerian National Petroleum Corp.; The Shell Petroleum Development Company of Nigeria Ltd.; Societe Beninoise de Gaz S. A.; and Societe Togolaise de Gaz S. A.

Note to Editors:

For additional information on the West African Gas Pipeline project, please see our news release of Aug. 11: "West African Pipeline Gets Green Light"


West African Gas Pipeline JVA and MOU Signing

August 16, 1999

FACT SHEET

Summary of the Memorandum of Understanding

  • Signed between the governments of Benin, Ghana, Nigeria, and Togo and the consortium group -- Chevron, Shell, Nigerian National Petroleum Corporation (NNPC), Ghana National Petroleum Company (GNPC), Societe Beninoise de Gaz S. A. (SoBeGaz), and Societe Togolaise de Gaz S. A (SoToGaz);
  • Confirms the consortium as Project Developer;
  • Establishes a legal framework for the project;
  • Establishes the process to expedite project development on a commercial basis.

Summary of the Joint Venture Agreement

  • Signed between Chevron, Shell, Nigerian National Petroleum Corporation (NNPC), Ghana National Petroleum Company (GNPC), Societe Beninoise de Gaz S. A. (SoBeGaz), and Societe Togolaise de Gaz S. A (SoToGaz).
  • Chevron appointed as Project Manager.
  • Objectives of the consortium:
    • Expedite development of the WAGP;
    • Jointly with the Governments, establish a world class enabling legal environment for the WAGP;
    • Develop the WAGP on a commercial basis to provide low cost, reliable gas transportation service.

Pipeline Benefits

  • The WAGP will be the prototype for inter-connection of the region, identifying and removing roadblocks that to date have hindered economic integration of the region.
  • The Pipeline creates a productive, economically viable alternative to flaring;
  • Use of gas for regional power and industrial development reduces greenhouse gas emissions by 100 million tons;
  • Availability of reliable, low cost energy provides a foundation to the creation of as many as 80,000 new jobs;
  • By enabling low cost development of electrical supplies, the Pipeline helps to save the local environment, including hundreds of thousands of acres of native forests;
  • The Pipeline provides infrastructure as a catalyst for regional investment in new industries -- potentially as much as $1.5 billion in additional investment;
  • The WAGP will enhance regional stability and cooperation;
  • The WAGP offers the lowest cost, most sustainable fuel (and electricity) solution for Benin, Ghana, and Togo.

Pipeline Specifications

  • Pipeline capacity -- Initial capacity approx. 200 mmSCFD, expandable to 600 mmSCFD.
  • Initial Volumes -- approximately 120 mmSCFD.
  • Pipeline length -- approximately 600 miles.
  • Pipeline cost -- approximate U.S. $400 million.
  • Proposed onshore landfalls: Contonou (Benin); Lome (Togo); Tema, Takoradi, Effasu (Ghana).
  • Pipe diameter -- between 18 and 22 inches.

West African Gas Pipeline Project
TIMELINE

1980's Economic Community of West African States (ECOWAS) and Governments of Benin, Ghana, Nigeria, and Togo conceive of regional pipeline systems to enhance regional economic growth and stability
July, 1993 World Bank-sponsored report concludes that it is feasible to build a pipeline system to convey Nigerian natural gas to Benin, Togo and Ghana.
September 5, 1995 Governments of Benin, Ghana, Nigeria and Togo sign a Heads of Agreement which agreed on the way forward for commercial development of the West African Gas Pipeline Project.
1997 Kyoto Protocol outlines financial incentives and adds impetus to WAGP Project via Kyoto's Clean Development Mechanism (CDM) for the reduction of greenhouse gas emissions.
August, 1998 Agreement signed commissioning WAGP feasibility study; participants include Chevron, Shell, GNPC, NGC, SoToGaz and SoBeGaz.
October, 1998 Chevron signs 20-year deal to supply 40 million cubic feet of natural gas to power a 220-megawatt power plant in Tema, Ghana; this agreement seen as the underpinning of the creation of a regional infrastructure to convert Nigerian gas into a viable power-generation source for the sub-region
March, 1999 WAGP feasibility study completed; concluded WAGP commercially and technically viable; recommends phased completion, and says project can be operational by the year 2002.
April 25, 1999 Chevron Vice Chairman Dave O'Reilly, in an editorial published in the Houston Chronicle, urges America to invest in Africa, and urges support of the African Growth and Opportunity Act (then) under consideration by Congress
April 25-27, 1999 Chevron executives from the United States and several West African nations participate in the Corporate Council on Africa's '99 Summit, and address more than 2,000 African leaders, U.S. Government officials and other oil and gas companies on the energy, economic, and environmental benefits of the WAGP Project
April 27, 1999 Executive Director of Chevron Nigeria Limited, Joe Anyigbo and Chevron WAGP Project Manager Chris Miller, make major presentation in support of WAGP Project to the Oil and Gas Africa '99 Conference in Accra, Ghana
May 06, 1999 WAGP Steering Committee, comprising ministers from Nigeria, Ghana, Togo and Benin, meets in Lome, Nigeria and appoints six-company consortium for WAGP development: Chevron, Shell and the gas companies of the four countries
May 20, 1999 Chevron executives from the United States and West African nations participate in the Africa/Africa-America Summit in Accra, Ghana; present status and recommendations for WAGP Project, reiterating environmental, economic and energy benefits for the Sub-Saharan region
May 20, 1999 Chevron Vice Chairman Dave O'Reilly announces the company will invest U.S.$12 billion in its African operations over the next 5 years
July, 1999 U.S. House of Representatives passes the Africa Growth and Opportunity Act; Chevron lauds the action
August 11, 1999 The governments of Ghana, Nigeria, Togo and Benin sign a Memorandum of Understanding which grants the rights to develop the WAGP, and establishes initial process for development between the governments of the four nations and the WAGP consortium of energy resource companies.
August 16, 1999 Consortium of 6 energy resource companies sign the WAGP Joint Venture Agreement naming Chevron as project manager.
2002 WAGP forecasted initial gas shipments.

Updated: August 1999