press release

Stakeholders in West African Gas Pipeline Sign Major Agreement

This is news concerning ChevronTexaco but issued by a ChevronTexaco subsidiary, Chevron Nigeria Ltd., and archived here for record purpose.

LAGOS, May 22, 2003 -- The West African Gas Pipeline Company Limited (WAPCo), a natural gas pipeline company formed by the West African Gas Pipeline (WAGP) Development Consortium, today signed the International Project Agreement (IPA) with the governments of Benin, Ghana, Nigeria and Togo. The consortium comprises Chevron Nigeria Limited, Nigerian National Petroleum Corporation, Shell Petroleum Development Company of Nigeria Limited and The Volta River Authority of Ghana.

The agreement, signed in Cotonou, Republic of Benin, confirms the mutual commitment of WAPCo and the four countries to the implementation of the project. The IPA, which sets out the commercial and regulatory structure applicable to the project, is also a demonstration of WAPCo investors' confidence in the economic climate of the subregion.

Speaking at the ceremony, Jay Pryor, Chairman and Managing Director of Chevron Nigeria Limited, described the agreement as a major step towards the successful implementation of the project. "Today's ceremony is a demonstration of the commitment of the governments and WAPCo to the success of this project that would significantly improve energy generation in the region while also enhancing regional economic integration. We have every reason to believe that the governments are very determined to put in place the legal and investment frameworks that would facilitate the success of the project," he noted.

The IPA establishes a comprehensive and harmonized Investment Regime that would make WAPCo operate effectively as a single business entity across the four states. Under the agreement, the government of the four states will set up a single regional regulatory authority to supervise cross-border pipeline development and operations. The agreement is also a significant step towards reaching the final investment decision for pipeline construction by the Consortium. The next three months will involve ratification of the WAGP Treaty and the enactment of the Enabling Legislation to give effect to the IPA and the Treaty in the four countries.

Pre-development activities currently taking place include the Environmental Impact Assessment Study and Front-End Engineering Design leading to approval by the states, which would then result in granting WAPCo the Permit to Construct the Pipeline, as well as securing necessary commercial arrangements with customers. Subject to achieving satisfactory commercial and permitting conditions, WAPCo forecasts reaching Final Investment Decision by year-end 2003 with first gas deliveries by mid-2005.

Updated: May 2003