Major oil pipeline set to help fuel Niger's growth

The 1,950-kilometer Niger-Benin oil pipeline, constructed by the China National Petroleum Corporation, is expected to increase Niger's oil production from the current 20,000 barrels a day to 120,000 barrels in 2024.

The $7 billion pipeline that is seen as a symbol of hope, upon which several major development projects depend, is set to transport crude oil to global markets, via the port of Seme on the coast of Benin from Niger's oil-prolific Agadem basin.

According to the African Energy Chamber, Niger's overall growth rates are expected to reach double digits for the decade after the completion of the pipeline in 2024.

The chamber said the pipeline also symbolizes the likelihood of greater explorations in the West African country.

Already, Savannah Energy, a leading African-focused British independent energy company with operations in Nigeria and Niger, has made five oil discoveries from five exploration wells in the Agadem Rift Basin, with a combined estimate of 6.7 billion barrels of oil initially in place in its two licenses.

The company has also identified a large exploration prospect inventory, consisting of 146 additional prospects and leads to be considered for potential drilling activity.

Several other companies are currently negotiating with the government to secure exploration licenses in the country.

"Niger's success is being closely watched by oil companies who in the past have paid less attention to the search for hydrocarbons in the Sahel. This is likely to change, with the successful completion of the pipeline," the African Energy Chamber said in a statement.

The laying of the pipeline is in line with a plan to drill 430 wells and build a treatment center in Koulele and a dehydration station in Dibella, according to the chamber.

China National Petroleum Corporation was contracted to construct the pipeline along with the West African Oil Pipeline Company.

The Chinese company received upstream approval of the project from Niger's government in June 2018 and later signed the pipeline construction and operation agreement with the government of Benin in August 2019.

The project is the largest cross-border crude pipeline of its kind invested by the company in Africa. Some 1,300 kilometers of the pipeline, the first phase of the project, will run within Niger and is estimated to cost $4.5 billion.

Construction works－involving surface infrastructure－on the project kicked off in September 2019.

However, the work was disrupted amid the coronavirus pandemic, interfering with the initial plan to commission the project by the end of 2021.

According to the African Energy Chamber, the project is expected to create 5,000 jobs. It will also comprise seven electricity stations and a new airport at Koulele.

China National Petroleum Corporation has been carrying out oil and gas businesses in Niger since 2003.The company owns and operates two exploration and development blocks in Niger-Block Bilma and Block Tenere.

It owns a 100 percent holding in Block Bilma and an 80 percent holding in Block Tenere, while TG World of Canada owns the remaining 20 percent.

The company also owns 60 percent of the Zinder refinery in southern Niger. The facility that has an annual throughput capacity of 1 million tons produces gasoline, diesel, fuel oil and liquefied petroleum gas, for domestic consumption.

According to Niger's government, oil accounts for 4 percent of the country's gross domestic product and the figure is expected to rise to 24 percent by 2022.

The African Energy Chamber attributes Niger's increasing investments to its political stability that has given investors more confidence in the safety of their investments.

The chamber also projects that a successful transfer of power in the next general elections will increase the country's attractiveness to investors.