DAKAR, Jan 31 (Reuters) - The presidents of four West African states signed a treaty on Friday clearing the way for the construction of a $500 million pipeline to transport cheap Nigerian gas to power industries in neighbouring states.

U.S. oil major ChevronTexaco holds a majority 36.7 percent in the pipeline, which aims to deliver the first gas to Ghana in mid-2005.

The treaty was signed in Senegal's capital Dakar by the heads of state of Ghana, Benin, Togo and Nigeria, West African officials said.

"The gas pipeline project is planned to facilitate the delivery of natural gas from Nigerian gas fields to Togo, Benin and Ghana by 2005," Mohamed ibn Chambas, executive secretary of the Economic Community of West African states, told reporters.

"It will supply the largest share of energy resources dedicated to power generation in these countries and eventually for domestic use," he said, adding that energy costs could be reduced by between 20 to 25 percent as a result.