University Project: Reflective Report on the Trans Sahara Mega Project

This reflective report examines the Trans Sahara Mega Project, a natural gas pipeline from Nigeria to Algeria, designed to diversify the European Union's gas supplies. The report analyzes the project's viability, considering factors such as resource availability in Nigeria, geopolitical relations between involved nations, and the increasing demand for oil and gas in Europe. It also addresses project management issues, including the need for segmentation, contractual agreements, risk assessment, and the involvement of multiple stakeholders. The report highlights the project's potential to alleviate poverty in African nations and provide Europe with much-needed resources, while acknowledging the project's mega-project status and associated complexities. The report touches upon the exhaustion of European gas fields and the advantages of the Trans Saharan Gas Pipeline compared to alternative sources like liquefied natural gas. Overall, the report provides a comprehensive overview of the project's background, viability, and management considerations.

The Trans Saharan Mega Project Reflective Report1
THE TRANS SAHARAN MEGA PROJECT REFLECTIVE REPORT
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The Trans Saharan Mega Project Reflective Report2
Reflective Report: The Trans Sahara Mega Project
Executive Summary
The exhaustion of natural resources in European nations is a phenomenon that has
brought benefits to the African Nations in the Sub Saharan region. This discourse examines the
Trans Saharan Gas Pipeline project, which is a project expected to help alleviate poverty in the
African nations involved and also help the European countries get much-needed resources. The
gas pipeline entails the creation of an oil pipeline that is expected to run from Niger Delta basin
in Nigeria, to Niger then to Algeria. The project is expected to cost almost 14 billion dollars, and
as such, it is classified as a mega project. For a mega project to run successfully, various issues
must be addressed. Firstly, the viability of the project must be examined, and in the case of this
project, oil is on demand in Europe, yet it is available in plenty in Nigeria to meet the demand.
Secondly, the discourse addresses the management process of such a big and complex project.
The paper states that this project will require that the project be segmented into smaller sessions,
and each is managed by different manager expected to work under a single project manager. The
project also is a business contract that will take a long time will require that the involved parties
sign a contract to ensure each party respects their end of the agreement. Optimum biases and risk
assessments are among some of the project management issues that have been addressed
regarding this oil project.
Introduction
It is without a doubt that recently, Sub Sahara African nations have improved in their
initiation of income generating projects that are intended to alleviate the countries from poverty.
Africa has, for a long time, been known for its surplus natural resources that are found in surplus.
The state of Nigeria, in particular, is leading the other oil producing countries in Africa in oil

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production. Further proof on Nigeria’s richness in oil can be found in different studies that have
revealed that on an annual basis, Nigeria produces more than two million barrels. Plans have
been initiated to help in the exportation of oil from Nigeria in Africa to European Countries. One
of such programs is The Trans Saharan Gas Pipeline which was undertaken to achieve the goal
of exporting oil from oil-rich-countries like Nigeria and Algeria to European countries (Akuru
and Okoro, 2011, p. 02).
Consequently, plans are underway to construct oil pipelines from Africa to Europe,
beginning with Nigeria to Algeria. A pilot plan of the Trans Saharan Gas Pipeline has revealed
that the pipes are expected to start from Niger Delta favorite for its oil fields that have plenty of
this natural resource. Starting the pipelines from this basin is crucial because it will ensure an
adequate supply of oil. The pipes will then cross various parts of the country before going out to
other countries on its way to Europe. On its way, it is expected to pass through the tropical
forests of northern Nigeria. It will then pass through Niger before landing in Algeria and further
pass through arid and semi-arid regions as well as the savanna areas of this part of the continent.
The engineers who drafted this pilot plan were keen on making the piping much more
straightforward and therefore they have proposed that the pipes have to pass through the Sahel in
Niger because it is a much easier route to connect to Nigeria (Zongzhi, Rujun, and Wang, 2014,
p. 01). It is believed that this route will manage faster transportation of the oil from Nigeria to
Algeria. The last place the oil plant is expected to land in is Hassi region (Environmental Justice
Atlas, 2018, n.p). This decision was also arrived at after the realization that most gas pipelines in
West Africa pas through Atlas Mountain before connecting in HassiR’mel region. The
convergence of all pipes in Hassi is also preferable because there is plenty of natural gas in this
area and so most natural gas pipelines converge at this point. The convenience of Hessi does not

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just stop at the connectivity of natural gas pipelines, but it is also convenient because there are
many pipelines to transport oil through the sub-Mediterranean links found within the region.
Additionally, the Mediterranean coast is equipped with many pipes such as Glass, Maghreb, and
Medgaz (Environmental Justice Atlas, 2018, n.p). In a nutshell, piping oil from Niger Delta,
through northern Nigeria to HassiR’mel region and finally to the Mediterranean coast is
excellent for speedy exportation.
When it comes to cost, the proposed plan is expected to cost thirteen billion dollars for
the project to be up and running. If this project succeeds, then it will be one among other mega
gas plants in Africa. The Trans Saharan gas plant is a big project that will cost billions because it
is expected to transport one billion cubic meters of oil. It is also going to run a long distance,
from Nigeria to Algeria (Wu, Zhang, and Yu, 2014, p. 01). Funding such a significant and
expensive and project requires several stakeholders, and so, the involved nations have sought for
funds from interested lenders in European. The lenders are willing to finance the project from its
initiation to its completion. Some of the targeted lenders are Anglo-Dutch shell, Spanish natural
gas organization, and French total.
Project Viability
Assessing project viability is necessary since it proves if the project is likely to succeed
and achieve the intended goals. The Trans Saharan Gas Pipeline is a viable project because of
several reasons. The first reason is in the region of choice. The company intends to make Niger
Delta in Nigeria their primary source of oil, which is appropriate because this region is the
largest source of natural gas. The richness in oil, however, is not the only advantage because the
part is also a deficient population around the area intended for the oil plant (Lyons and Plisga,

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2005, p. 115). A small community means reduced risks from vandalism and also loss of lives in
cases of emergencies. The area also is similar to Atlas because the city has plenty of oil and
natural gas and the benefits of this is that there will be a constant supply of the natural resource
for a very long time before it becomes exhausted. The Trans Saharan Gas Pipeline will be
capable of enjoying the resources and making enough profits before it is exhausted. Studies by
Akuru and Okoro (2011, p. 05) has shown that it might take another 40 years before Nigerian oil
is drained. However, the same study has shown that the oil reserve has increased, which makes
this approximation to be on the lower side.
The second reasons why the project is viable is in the geopolitical relations between the
nations involved. State relations are very crucial in the success of international projects like this
one that requires the support of the different nations. Therefore, the oil piping project is likely to
succeed and achieve its goals because the three countries involved have excellent geopolitical
relations. The rapport between the nations has led to the opening up of business transaction
fronts like the current gas pipeline project (EITEP Institute., 2019). The agreement that has been
made between the nations involved in the project have proved that the project is likely to succeed
and achieve its primary goal of piping oil and natural gas from the region to Europe. The project
also hopes that ultimately, nations will benefit from the initiative and supply to the targeted
market will be constant. The project is viable since Nigeria produces enough crude oil to meet
the needs of demand by the European market.
The continent of Europe has currently run out of natural resources like oil and natural
gas. Due to the lack of these resources, some nations in this region have resolved to import these
resources that are on high demand from countries with plenty of supply and then sell to the other
nations. The need for oil and natural gas by European governments is not ending any time soon

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primarily because most factories in the continent rely on fuel and machinery are powered using
fuels (Liu, 2003, 59). Furthermore, there are oil wells that have been found in Europe, but these
wells are fragile, and experts have cautioned that heavy mining may deplete these wells. These
factors discussed are contributors to the increased and constant demand for oil and natural gas in
Europe. They are also an indicator that the project is viable because the demand for oil and
natural gas in Europe is not going to end, and importation is inevitable.
The project is also viable because the alternative source of fuel has additional costs that
make it unpopular. Liquefied gas is another way of getting fuel, but this method required that the
company involved must re-gasify methane into the liquid gas. Latha and Indian Geotechnical
Conference (2019 p.106) state that liquefied natural gas has to be gasified using methane to
return it to its initial state. This approach is quite expensive compared to piping, which is also
readily available. When natural gas is piped in its original state, the processes it has to undergo
before it is used are quite more straightforward since they involve processing the natural gas to
different fuels used in Europe (Wagner and Armstrong, 2010). Therefore, this ease in the
process makes piping a more viable method of supplying oil and natural gas.
Another reason that makes the Trans Saharan Gas Pipeline project a viable one is the fact
that Russia currently is the major supplier of oil in Europe and such a scenario has several
disadvantages. One of the outstanding demerits is that, when many nations rely only on one
source of supply, prices are likely to be higher. However, in the case of Nigeria, there are several
vast oil reserves capable of supplying the European market and meeting the needs of Europe.
The oil reserves in this African nation has been surveyed and found to produce up to two million
barrels of oil annually, as indicated earlier. Consequently, since Russia has increased the prices
of oil because it is the major supplier and the demand is high, European nations are likely to

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resolve to get supply from African countries (Tong, Wang, and Wu, 2016, p. 144). The decision
to import from Nigeria will not only be an excellent one because of affordability but also because
the supply will be much higher. Consequently, the project will be viable because the only
competitor to Nigeria will be Russia, yet Nigeria will compete stiffly because of cost.
Exhaustion of European Gas Fields
Europe began mining natural resource several years ago, and over the years these natural
resources have been exhausted. The European governments have been therefore pushed to meet
the demand for oil in the continent through alternative means. It is expected that seventy-five
percent of significant oil sources in Europe will be depleted by 2030. Moreover, oil wells in the
continent have been described by researchers as having passed their peak mark. At this rate, it
means that European nations have to move expeditiously to ensure that they sustain the supply of
this energy that is needed in industries and other uses. The solution has, however, been found in
other nations that have plenty of oil and are willing to export overseas. Thus Europe has the
alternative of importing oil from such countries to meet the demand.
Project and Program Management in Mega and Complex Projects
Setting up the Trans Saharan Gas Pipeline is expected to cost about thirteen billion
dollars. This project will see a natural gas pipeline constructed that will pass through Nigeria,
Niger, and Algeria. One team will be set up to oversee and manage the project entire project.
Groups of project managers will be formed to manage the project in sections (Project, 2013, p.
31). Each local area will have a manager starting with Nigeria’s Niger Delta Basin to Hassi in
Algeria and then to the Sahel in Niger. The pipeline is expected to cover over two thousand
kilometers in the nation of Algeria alone. The project should complement the work that has

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already been done in Nigeria where the pipe is expected to stretch for over nine hundred
kilometers so that it can reach the northern border of Nigeria. In total, the pipeline will stretch for
one thousand kilometers from the Niger Delta basin to the neighboring country in the north.
To effectively manage such a project, the managers can segment the project into
manageable segments. Each segment can then be considered as a smaller project with a
manager, but they all should embrace the hierarchy of leadership (Binder and Ebrary, 2007, p.
205). Every leader of a smaller project should apply liaison as a mechanism for ensuring
coordination and consistency in the entire project process. When the managers initiate such an
approach, the approach will be similar to job specialization. Job specialization, on the other hand,
is essential for the success of such a project because it ensures that tasks are completed in time
due to accountability (Witthaus, 2008, p. 57). Also, the unforeseen costs that may be incurred are
avoided because the project has been segmented into the section, and each project manager can
be useful in the area they are given. Furthermore, according to Binder and Ebrary (2007, p. 205),
such a job specialization approach makes each manager have confidence in their capabilities.
Safety is also ensured with this kind of approach because each manager can ensure that their
segment of the project is standardized, especially because terrain issues may arise in the arid and
semi-arid areas. It is essential that each section is custom-made for the kind of terrain that it is
likely to encounter.
Business Organization
The project that is to be carried out by Trans Saharan Gas Pipeline is one that requires a
lot of money as already discussed above. It will cost the company about fourteen billion dollars
for the entire project, where eleven billion of this amount will be required for infrastructure only.

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There are three countries that will be involved in this project, Nigeria, Algeria and Niger and
they have been found to be capable of raising about seventy-eight percent of the entire amount
through grants and loans from developed nations that commonly finance their projects even
though there is need for a contact (Cordero-Moss, 2014, p. 10). The rest of the funds are to be
generated by the organization and other shareholders in this project.
Furthermore, such a project requires contracts so that each party can honor their side of
the whole deal. Contracts will not be a challenge because the U.N. provides for arrangements for
these kinds of business agreements that involve many countries. In such a contract, the oil
producer is always required to guarantee that the oil that will be produced will be sufficient to
meet the source (Kwegya and Abraham, 2017, p. 186). The producer, on the other hand, is also
not required to seek for other markets besides the consumer who is a stakeholder to the project.
Furthermore, the producer must be committed to the business agreement by first producing oil
that is considered sufficient for the consumer in the first round (Flyvbjerg, Bruzelius, and
Rothengatter, 2003, p. 07). These tenets of the agreement are very crucial to ensure that one
party does not let the other part down. For instance, the producer should not set aside the
consumer even after committing to purchasing oil from them.
On the other hand, the consumer should not seek another source after the supplier has
committed money into producing for them oil (Kwegya and Abraham, 2017, p. 189). It is notable
that oil and natural gas are products that are in high demand internationally, and their prices are
bound to fluctuate depending on the market and the supply, which in turn impacts the costs. Thus
another crucial concept of the agreement is that the two parties should agree on the price and
should also agree that the price is likely to fluctuate according to based on the fluctuation in the
international market.

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Honesty is required in such a mega project that involves a lot of money, and hence, trust
is necessary to make the project go through especially because the project is going to be a long-
term business contract. To ensure faithfulness between the parties, the contract may be presented
in the form of taking or pay, ship or pay and deliver or pay (Kwegya and Abraham, 2017, p.
189). Trans Saharan Gas Pipeline project will thus involve parties who will be obligated to each
other, and thus such term of the contract is fundamental for each member to operate faithfully.
Ship or pay is the form of contract that is a contract that requires the consumer to pay for all the
expenses that they are required to pay for and also to pay for the transportation and tariffs
involved in taking the gas via the pipeline. This agreement does not consider any other
conditions as if the consumer refuses to take the product or receives it. Deliver or pay is an
agreement that requires the user to commit to the fact that they will deliver the oil to the
consumer regardless of the many conditions and they are to pay in case no deliver it made at any
one time. The other contract type is the take or pay contract that requires the consumer to
purchase the oil from the producer regardless of the conditions (Kwegya and Abraham, 2017, p.
190). Therefore, in case the consumer has enough oil, they are still required to purchase the oil or
pay whenever they do not buy. In case the European countries are ready and willing to import
oil from Nigeria, then they may choose to enter into a long term contract with the state. It is
advisable at this point that the two parties make a custom contract so that the arrangement can be
flexible for both of them. The flexibility of custom contract is vital because it will protect each
party during price fluctuation. The business agreement must also be drafted to make it easier for
this trade to go on.
Stakeholder Priorities

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In many nations, trade with other countries can involve country trading and the consumer
country. In some cases, the country engaged in business can choose to have their private
companies participate in the trade with the consumer country on their behalf. In case a country,
like in this case, Nigeria decides to use private entities, then they must have enough business
policies as demanded by their country. Through such systems, the government can put in place
profit and business-oriented platforms for them to earn some income (Poon and Rigby, 2017).
Parastatals and private companies support the government in engaging in international projects
and also help the nation to meet their objective such as making money. Nigeria, in this case, may
use Nigerian National Oil Corporation, which is a company that, on behalf of the government of
Nigeria, is in charge of petroleum mining. Such a company helps the government meet the needs
of the consumer because they confirm that what has been mined in the field is precisely what is
expected by the government. They also make sure that the standards set by the country are
adhered to during the mining process (Poon and Rigby, 2017). Parastatals are essential to
government because they secure such business opportunities for the government.
Optimum Bias
Optimum bias is a case where one party in the trade, especially the consumer, may be on
the losing end in case of political unrest or any form of conflict begins in the supplying nation.
The governments involved in the trade as suppliers (Nigeria, Niger and Algeria) as well as
governments engaged in the business are well aware that the Trans Saharan Gas Pipeline project
is likely to have optimum bias in the likelihood that conflict may arise in one of the nations
leading to loses and probably inability to supply oil to the consumer country (Turner, 2012, p.
01). It is of high demand that the three nations involved should make an optimum bias analysis in
case there may arise a conflict so that they can meet the examined tragedies and impacts of the

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disaster. In the process of doing this, they should consider the primary and secondary purposes of
the project then test the capability of running the business even when there is a tragedy.
Conducting a non-bias analysis will help prevent any breach of contract in case tragedy arises
(Eskerod and Jepsen, 2012, p. 40). Continuity of the supply of oil will depend mainly on the
unity and role played by the three nations to avoid optimum bias.
Optimum bias analysis is optional however it is essential because it helps the investors to
determine the challenges that are likely to emerge that may hinder their ability to meet the needs
of the consumer and to identify the interventions that they are likely to put in place to solve the
challenges (Fernandez and Fernandez, 2009, p. 11). Being aware of optimum bias is also of
benefit to the business partners because the suppliers will be accountable for the tragedies that
are to come. It further helps developed tragedy mitigation plan.
The European nations believe that optimum bias incidences may not be of significant
damage, but they are however of the idea that the African countries that have invested in this
project should evaluate and evaluate the possible risks and solutions to the hazards that may
occur just in cases of emergency. They should have a well-planned tragedy response plan that
includes techniques and schedules that are to be used in case of tragedy.
Misrepresentation of Benefit and Value
When dealing with such a big project, there are many risks involved, and these risks are
also costly which is why it is essential for the company and nations involved to plan before
engaging in the project. The planning process itself usually is time-consuming and also costly
since it includes experts. Each phase of the project must be well planned and projections made so
that the plan does not fail (Hu, Chan, Le and Jin, 2015, n.p). The business case must be prepared,