Oil begins to flow through China-backed Niger-Benin pipeline

Photo credit: Africanews

The first oil from the Niger-Benin pipeline has successfully reached the port town of Sémè Kraké in Benin. Spanning 1,950km, this crude pipeline, which connects Niger’s Agadem oil fields to the Atlantic Ocean, is the longest of its kind on the continent and is operated by China National Petroleum Corporation (CNPC). With a capacity of 110,000 barrels per day (b/d), it is poised to transform Niger’s oil sector.

Landlocked Niger currently produces approximately 20,000 barrels of crude oil per day (b/d), mostly from CNPC projects in the Agadem Rift Basin in the country's southeast. Previously, Niger’s oil was primarily consumed domestically due to the absence of an export route. However, this situation is set to change with the completion of the Chinese-built pipeline, 

Work on the pipeline began in 2019 but faced delays due to the Covid-19 pandemic as well as a coup in Niger in 2023 that ousted President Mohamed Bazoum, resulting in military control. Benin, a member of the Economic Community of West African States (ECOWAS) regional bloc, participated in the imposition of sanctions on Niger, blocking crucial equipment for the pipeline from crossing the border between the two nations. For instance, several pump stations in Niger awaited equipment that was stuck in Benin. However, in February, seven months following the coup, ECOWAS eased sanctions on the junta-led Niger, allowing CNPC to finish construction of the pipeline.

In April, Niger signed a memorandum of understanding with CNPC valued at US$400m, related to the sale of crude oil from its Agadem oilfield, according to state-owned broadcaster RTN, which did not provide further details.

Niger is estimated to have reserves of a billion barrels of crude, according to the African Petroleum Producers' Organisation. Key players in the industry include CNPC, UK-based Savannah Energy, and Algeria's Sonatrach. CNPC is active in the Agadem region and also supplies oil to the Soraz refinery in Zinder, in which it holds a 60% stake. Savannah Energy has made several oil discoveries and is progressing towards their development. The company hopes to initiate a 1,500 b/d oil project soon, with plans to increase production to 5,000 b/d. Thanks largely to the successful operation of the project and the anticipated large-scale oil production and exports Niger is expected to be Africa’s fastest-growing economy in 2024, with a GDP growth forecast of 12.8%.

 

References

‘Niger: an attractive nation with an emerging oil industry’, African Business, 08 November 2021

‘Niger coup could jeopardize oil production boost, create regional security vacuum’, S&P Global Commodity Insights, 28 July 2023

‘Africa set to be the second fastest-growing region in the world in 2024’, NTU-SBF Centre for African Studies, 29 January 2024

‘West African bloc lifts sanctions on junta-led Niger’, Reuters, 26 February 2024

‘Niger on verge of first oil exports with 110,000 b/d Benin pipeline completed: sources’, S&P Global Commodity Insights, 07 March 2024

‘Niger and China sign crude oil MOU worth $400 mln, says Niger state TV’, Reuters, 13 April 2024

‘Niger-Benin pipeline: First drops of oil arrive at Sémè Kraké’, Africanews, 24 April 2024

‘Niger: Country overview’, Savannah Energy, Accessed 27 April 2024

‘Niger–Benin Oil Pipeline’, Wikipedia, Accessed 28 April 2024