A most interesting analysis from the blog “On Political Risk, detailing Russia’s recent steps to move closer to its goal of dominating the North African gas market, a potential alternative supplier to Europe.  As the report notes:

“…Gazprom signed a Memorandum of Understanding with Nigeria to develop gas and oil projects there.  Gazprom is already in talks with Lybia where it is seeking to develop a gas pipeline to Sicily, and it opened an office in Algeria where is hoping to sign a deal with Sonatrach.

The ultimate goal for Russia would be a gas pipeline from Nigeria, through Niger, ending at Algeria’s export terminals on Mediterranean coast, then on to Spain.  The Nigeria/Algeria Trans-Sahara Gas Pipeline (TSGP) is estimated to cost $13 billion, but some argue that it is technically and politically impossible.  The MoU seems to remove some of the political obstacles, but not all.

Not least amongst the problems for Russia is that Nigeria’s most potential blocks are already under control of the Western majors.  But Nigeria has been trying to get these companies to stop flaring gas for years, and the Western majors have dragged their feet citing instability in the region and cost over-runs that they want the government to cover.

Other problems are more technical.  The recently opened West African Gas Pipeline is supplying Ghana, but doesn’t have enough supply to serve Benin and Togo.  Until supply can be increased, the prospects of TSGP seem slim.

Obviously if Gazprom is successful in these deals it would reduce the European Union’s leverage over Russia.  It’d also change the balance of power between the US and Russia, since Europe would have to be more careful about provoking Russia with stupid offers of NATO membership for Georgia and Ukraine….”