Dangote planned pipeline investment to ease gas distribution issues

Aliku Dangote, Africa’s richest man, plans to increase Nigeria’s gas distribution by 300 percent with investment in pipeline building. Carlyle Group and Blackstone Group, the world’s two biggest private equity firms, have being identified as potential partners on the project. The project will include a $2.2bn to $2.5bn investment in two sub-sea 550km pipelines running from the Niger-Delta region to Lagos.

The pipeline will increase gas distribution in Nigeria from 1 billion cubic feet per day (Bcf /d) to 4Bcf/d. The project is expected to commence by the end of 2015 with the first pipeline ready for operation by mid-2017. Industry analysts believe the completion of the pipeline could potentially end Nigeria’s gas shortage especially as regards power generation. Over 50 percent of installed capacity of thermal power stations are currently inaccessible due lack of feed stock. When completed, the project will also provide incentive in terms of monetisation to production companies with associated gas to process the gas for evacuation by the pipeline.

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