The bilateral agreement on the oil export pipeline project between Niger and Benin — signed on 23 January 2019 — is a decisive step forward in the plans to export Niger’s crude oil. The country’s current production of around 20,000 b/d is set to increase to around 110,000 b/d by 2021 and possibly 200,000 b/d in the longer term. The agreement with Benin resolves the question of whether Niger will either export oil via a pipeline spur to the existing Chad-Cameroon pipeline or build a new pipeline through Benin to its Atlantic port of Cotonou.
The decision to build a new US$2-US$4 billion pipeline through Benin has probably been determined by a number of factors including: Chad’s potential political instability; and the Chad-Cameroon pipeline’s technical problems caused by financial short cuts being taken so that insufficient safety valves were installed. In addition the oil storage vessels on Cameroon’s Atlantic coast at Kribi are still believed to be single-hulled and in contravention of current maritime law. The major consideration in choosing the Benin option is, however, believed to have been the Chad-Cameroon pipeline’s limited capacity. A new bespoke 2,000 kms pipeline — from Niger’s oil fields in the Agadem Basin to Benin’s coast at Cotonou — would give Niger control over its own export destiny. The pipeline will be managed by the China National Petroleum Corporation (CNPC) with the participation of both host governments.
The pipeline project is extremely important for landlocked Niger whose nascent but ambitious oil sector is currently limited to supplying 20,000 b/d of crude oil and condensate to the Chinese-built Société de Raffinage de Zinder (SORAZ) refinery. The latter’s output is sold to the domestic market with very limited exports to Mali, Burkina Faso and Nigeria.