Dangote courts Blackstone to boost gas supply

Africa’s richest man, Alhaji Aliko Dangote plans to quadruple the supply of gas to Nigeria by building pipelines that may be backed by Carlyle Group LP and Blackstone Group LP, the world’s two biggest private-equity firms.

Dangote, who has a net worth of $15 billion, will invest $2.2 billion to $2.5 billion in two sub-sea 550-kilometer (341-mile) pipelines running from Nigeria’s oil and gas-producing Niger River delta region to the commercial hub of Lagos.

Dangote, 58, said in an interview over the weekend that the pipes will increase the amount of gas available in Africa’s biggest economy to 4 billion standard cubic feet per day from 1 billion.

While Nigeria has gas reserves of about 180 trillion cubic feet, more than any other African country, most of what’s produced is flared or exported because of a lack of infrastructure to transport it to local companies and households.

Boosting domestic supply will help increase electricity generation in a country where power cuts are common and about 70 percent of electricity plants are fueled by gas, according to Dangote.

“Having an additional 3 billion scf will sort out all the gas issues we have today in Nigeria,” he said in the lounge of his house in the Victoria Island district of Lagos, overlooking a half moon-shaped swimming pool. “It’s badly needed.”

Dangote, who has interests ranging from cement to sugar and oil refineries, plans to start laying the pipelines before the end of the year, he said.

The first one should is expected to be ready by mid-2017.

The International Finance Corp. is considering an investment in the pipelines as are Blackstone and Carlyle, he said.

“We have a lot of companies that are very interested in participating,” Dangote said.

Blackstone and Carlyle said in August they would partner with Dangote Industries Ltd., the holding company for the billionaire’s operations, to invest in sub-Saharan Africa.

Blackstone said its Johannesburg-based partner Black Rhino would jointly invest as much as $5 billion with the company on energy and other infrastructure in the region.

The pipelines could be used by oil producers in Nigeria that currently have little incentive to sell gas from their fields in the country, including Royal Dutch Shell Plc. and Exxon Mobil Corp., Dangote said.



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