Total has built a $900m, 24-inch pipeline infrastructure covering 50km to make sure that it will supply gas to the Alaoji Power Station located in the Abia State, Nigeria. The pipeline infrastructure begins from Oil Mining Lease (OML) to Imo River, and finally to the 964MW Alaoji Power Station.
According to the MD at Total Upstream, Nigeria, Mrs. Elisabeth Proust, the company is optimistic in starting to supply gas to other industries by 2017. The pipeline would be useful in this respect. She further revealed that domestic gas price – currently standing at US$2.5 per million British Thermal Unit (BTU) – should be increased to US$7 per million British Thermal Unit (BTU), claiming that good prices will ensure that such projects are viable.
However, the company will supply gas to Alaoji plant at a price of US$2.5 per million British Thermal Unit (BTU), although the company has noted that the pricing will not guarantee sufficient returns on the investment.
She added that they require a pricing of between US$5- US$7 per million BTU for the growth of such facilities. Total is considered to have taken up a risk in sustaining the big project in Nigeria amidst pricing issues. However, the project will help in creating more employment opportunities.
