By Lateef Adegbite
When the Russia Energy Company, Gazprom, at the instance of Vladimir Putin, the Russian President, who has the backing of the Kremlin to cut off gas supply via the Nord stream pipeline over alleged malfunctions of a turbine in late 2022, to Germany, Italy and other European countries.
Olaof Scholz, Germany , Chancellor , knew his country was in deep trouble. The Germany Chancellor has every reason to worry because the country needs considerable amount of gas for heating the homes and power the industries. It was a matter of time for the inherent problems to begin to manifest in the country. This may have informed why Scholz, the Germany Chancellor had to look for alternative reliable gas partners that would take the place of Russia, which over the years had been the major supplier and long been a boon to industries in the country. It was not surprising why European union, EU, member country, based companies operate at lower costs and gain competitiveness.
Recall that the EU, which had imposed various economic sanctions against Russian for invading Ukraine early last year with its serious economic implications. This is because the Russian government in retaliation ‘’ demanded that all gas shipments to the western importers be paid in Russian roubles’’. The EU, may have seen the Russian government demand for payment of gas shipment in roubles as a ploy to use natural gas as a tool to influence the Union policy makers. The Western importers which never found the Russia demand funny were said to have refused to accept the offer, insisting that they will not accept a change to the existing contracts for gas supply that stipulate other currencies.
Note that natural gas delivery to Germany, particular, from Russia, accounts for about 27% of its total energy consumption in the first quarter of 2022, for heating of homes and power the industries.
The continued reduction of the deliveries to Germany and other European countries may have taken a turn for the worse since late 20222, as the EU, United Kingdom, UK, and the North American country of the United States , US, intervened in the war by supplying arms and ammunition to Ukraine, including financial support to sustain the war. This may have encouraged the Russian government ‘’to completely halt gas supplies’’ to the western importing nations.
The Germany government may have seen it as a big challenge as it had no option but to look out for alternative sources of gas supply to the country which include the Netherlands, Belgium, Norway, Nigeria, Qatar and the US.
The Value News findings shows that the three EU, member countries and the US, including Qatar and the North African country Algeria which had increased their gas export volumes to Germany could not fill the gap left behind by Russia. T Nigeria, a major gas producing nation, which currently supplies 25.7% of the Germany gas needs became a ready market as the Germany government had to initiate talks with the Nigerian to increase the shipments fill the vacuum, left by Russia. At present, Nigeria is Africa’s largest proven ga reserves, estimated to be 202 trillion cubic feet . The African largest gas producing nation, between 2022 and now, has been keen on entering the European Union, EU, gas market toward helping to meet their gas needs after Russia sharply reduced its natural gas supply following its war with Ukraine.
As a prelude to a planned visit to Nigeria, the Germany Chancellor and his Nigerian Counterpart, Bola Ahmed Tinubu, were said to have met at the G20 Summit in New Delhi, Capital of India where they were said to have had a very rewarding discussion. ‘’I am happy to inform you of my desire to visit Nigeria in October 2023, to cement our business initiatives’’.
The Germany Leader may have taken advantage of the visit to the Sub- Sahara Africa, described as a ‘’potential exporter of hydrogen energy amid calls for energy transition in the EU, to visit Nigeria to continue the talks with Tinubu which they had started at New elhi, India, for going into ‘’investments for the future’’.
On Sunday, October 29, 2023, the Germany Chancellor, who had embarked on a two-day visit to Nigeria , accompanied by a delegation of high ranking business people including Chief Executive officers , CEOs, of some of the highest -valued companies from the country arrived with a mindset to discuss with the Nigerian government.
Tinubu, the Nigerian President may have gotten the message right when the German Chancellor said ‘’the country is committed to joint initiatives with the Nigerian government when it comes to gas supply ‘’. The two Leaders were said to have discussed trade -related issues and investment opportunities . Germany-Nigeria trade volume is estimated to be about three billion euros annually.
Informed sources at the ministry of Industry, Trade and Investment confirmed that Nigeria had exported 1.9 euros of oil, to Germany. That much was also contained in the United Nations, UN, COMTRADE data base on international trade. The EU, member country, in turn was said to have exported to Nigeria. goods, including machineries and other economic components valued at 1.1 billion euros.
Following their discussions, Scholz, the Germany Chancellor was said to have made his Nigerian counterpart to understand that that the Germany government is driving forward ‘’future production and use because natural gas is the energy source of the future, and ‘’the country need a lot of it for power generation, household heating and industrial processes’’ . At present, over 30% of households in the EU, uses gas to heat their homes
. The Germany Leader had said that ‘’considerable demandfor natural gas, and ‘’concrete amounts ‘’ of supplies should be agreed on in negotiations between Nigerian gas producers and Germany gas traders’’ .
Horst Koehler, Angela Mrkel, and Christian Wulff, all former Chancellors’ of Germany had at one time or the other visited Nigeria which was said to have led to the signing several agreements in the areas of gas supply, trade and culture. This may have informed why in 2019, Muhammadu Buhari, the immediate past Nigerian President had contracted the Germany energy company, Siemens to assist Nigeria to generate at least 25,000 megawatts of electricity for the national grid by 2025.
Enough of the Germany and Nigeria trade -related talks. We turn to the , EU, member country working relationship with the Omar Alieu Touray, led Economic Community of West African States , ECOWAS, Commission.
The ECOWAS Commission, President, may have gladdened the heart of the Germany Chancellor, when he disclosed that the 81 million euros or $85.9 million granted to the economic sub-region would help ‘’to address the problem of insecurity, infrastructural deficits particular, electricity supply and climate change in the region. Touray had revealed thatthe latest grant of 81 million euros from Germany brings to 500 million euros, the total of the country’s financial support to the west African subregion for over a decade.
Given an insider information on how the money would be used, the ECOWAS Commission President had said that ‘’there is plan to link the electricity supply power generation through Cotonou, Capital of Benin Republic to allow the 15 member- countries to get the electricity supply from a cheaper source from the economic bloc.
