What is the Economic Justification for the Nigeria-Morocco Gas Pipeline? - Africa’s premier report on the oil, gas and energy landscape.

What is the Economic Justification for the Nigeria-Morocco Gas Pipeline?

By Dan D. Kunle

The Nigerian state hydrocarbon company, NNPC Ltd has announced, with flourish, the plan to take final investment decision (FID) on the proposed Nigeria to Morocco to Europe Pipeline by 2023.

But is this the important project that NNPC and the Nigerian Government are making it out to be?

Mele Kyari, the NNPC’s chief executive, reportedly restated the price tag: $25Billion to Bloomberg. He was also more forthcoming about the length: 5,600Kilometres.

The line is proposed to originate from Lagos and run parallel the West African Gas Pipeline currently linking Nigeria and Ghana, a project which has struggled with certainty of gas delivery and has underperformed its contractual obligations for the 10+years it has been in operation.

The facility, for which a Memorandum of Understanding (MoU) between Nigeria, the Economic Community of West African States (ECOWAS) and Morocco was signed in late September 2022, now looms larger in our consciousness than any other hydrocarbon evacuation project in play, in the context of Europe’s desire for natural gas to replace Russian supply.

“I am not unaware of the phosphate fertilizer production and supplies from Morocco to Nigeria. But this monoproduct is not sufficient to justify a gas pipeline, as compared with LNG plants and regasification facilities…”

Last March, the OPEC Fund agreed to a $14Million contribution to a $90Million loan for the Front-End Engineering Study (FEED) of a part of the Project.

The line will ultimately pump Nigerian gas through the Maghreb-Europe pipeline to the European gas network. Along the route it is expected to supply gas to the land-locked countries of Burkina Faso, Mali and Niger. In will pass through Benin, Togo, Ghana, Côte d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, The Gambia, Senegal and Mauritania.

Among the questions that keep coming up, are: How sudden has the economic and technical justification been validated for this type of project from Nigeria to Morocco?

At what cost is this project and where is the funding likely to come from?

Who scoped this project?

Have all the maritime permits and approvals, country by country, been obtained?

Who are the offtakers, where are their Gas Sale and Purchase Agreements (GSPAs)? Who are the producers? What are the upstream details? Where is the investment plan by NNPC for the production of the gas that will be dedicated to this ambitious pipeline?

Who, when and where will the gas be produced to feed into this type of an ambitious dream?

How many years will it take Nigeria and Morocco to implement and complete this ambitious project?

It may be pertinent to ask the Nigerian government and NNPC Ltd, what has happened to the Obrikom-Obiafu to Oben (OBOBOB ) project, which construction has lasted 16 years; what is the status of that project now?. What is going on with this very important project from the East Niger Delta to the West of the country?

Why would Morocco not consider building a REGASIFICATION facility in her country and also possibly acquire LNG carrier vessels to move around the ocean waters of the world?  Is this not more cost effective than embarking on an extensive undersea gas pipeline?

Morocco does not need this pipeline all the way from Nigeria, unless there is something we don’t know. Could it be political and territorial ambition? But for what purpose?

Morocco can purchase LNG from Senegal and/or Mauritania; countries that are close to her, either by LNG carrier vessels, which are more flexible or by gas pipeline, because of the short distance.

Does the MoU between Nigeria and Morocco imply that the Federal Government and NNPC abandoned the AKK pipeline to Niger and Algeria enroute to Europe, in favour of this undersea line to Europe through Morocco?

Why will the Nigerian government want to waste time and money in this critical period when we have no adequate domestic gas delivery framework?

Does this Nigeria-Morocco gas pipeline replace the other LNG plans; Brass LNG and OK LNG?

Twenty Million Ton capacity LNG plants will cost about $21Billion today and Nigeria with her gas resources can actualise these projects in five years, if we are determined to join the LNG suppliers race in the world.

The USA started LNG production and supply only in the last ten years and they are gunning for Number 1 position against Qatar and Australia. It will be very uneconomical for Nigeria to abandon LNG projects  for a white elephant, undersea gas pipeline from Lagos to Morocco.

There are so many numerous advantages for Nigeria to develop her LNG projects because of the value additions in maritime and shipping business. The cost of maintaining the gas pipeline underwater is enormous.

The global race for LNG production and supplies is heating up because of (1) the Russian/ Ukraine conflict and (2) gas is a transitional fuel. If the supply from Russia had not been through pipeline, but by LNG vessels, the situation would not have been this precarious.

Having rationalized and reviewed this ambitious gas pipeline between Nigeria and Morocco, I am not unaware of the phosphate fertilizer production and supplies from Morocco to Nigeria. But this monoproduct is not sufficient to justify a gas pipeline, as compared with LNG plants and regasification facilities as the case may apply to each country. At any rate, Togo has huge phosphate deposits and it is close to Nigeria, so why can’t Nigeria simply develop the deposits next door?

From records, ECOWAS economic treaty and Nigeria’s development plans had recommended a railway system in the region that will, among others, transport phosphate deposits from Togo to the Federal Superphosphate fertilizer complex in Kaduna.

Have NNPC and the Federal Government abandoned the Trans Sahara Gas project that was going to go from Nigeria through Niger Republic (also expected to pump its own gas) to Algeria and Europe?

Dan Kunle is a business and privatization consultant.

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2 comments

  1. Doherty Olukayode Oloketuyi says:

    The proposed Nigeria to Morocco gas pipeline project is another white elephant project that may never be completed while huge resource would be wasted in carrying out all the necessary pre-investment activities. Nigeria is not known for deep reflection before taking project decisions. Most of the time investment decisions are taken based on primordial sentiments and not on any economic factors. That is why a complex refinery was sited in Kaduna which will depend on imported crude for the running of a part of the plant when the obvious suitable location is a location near the ports located in the South. The refinery has never operated at full capacity since it was built because of vandalized pipelines and shortage of feedstock that must be imported.
    Most of the thermal power plants in Nigeria are idle for lack of gas because they were built without the necessary study needed for source of gad. How will a country that cannot deliver adequate gad for its domestic consumption now plan to deliver gas through a 5000+ kilometer pipeline to Morocco for onward delivery to Europe.
    This is another white elephant project that is meant to enrich some briefcase business men after they have oiled the dirty hands of some Nigerian political and business leaders without delivering on the project.
    As stated in the body of the write up, it is more reasonable and makes more economic sense to build LNG plants in Nigeria and deliver the products via ocean going vessels to Europe.
    The proposed pipeline will add to Nigeria’s list of failed projects after so much resources would have been expended on the project.

  2. Suleiman Musa Pema says:

    15th August, 2022
    His Excellency Muhammadu Buhari GCFR,
    President of the Federal Republic of Nigeria,
    Presidential Villa,
    State House,
    Abuja

    Your Excellency,
    THE NIGERIA/MOROCCO TRANS-ATLANTIC GAS PIPELINE PROJECT.
    The Nigerian Movement for the Liberation of Western Sahara, NMLWS, with due and profound respect for Your Excellency, here conveys our compliments to Your Excellency.
    The Movement is a coalition of Nigerian mass organisations of repute including the Nigeria Labour Congress, NLC, the Trade Union Congress of Nigeria, TUC, the Academic Staff Union of Universities, ASUU, the Joint Action Front, JAF, Women Advancement for Economic and Leadership Empowerment, WAELE AFRICA, Committee for the Defence of Human Rights, CDHR, Amilcar Cabral Ideological School- Movement, ACIS-M, Students Associations and Civil Society Organisations. All the aforementioned organizations are bound together by a commitment to ensuring the end of the historically, politically and morally unacceptable colonial rule in Western Sahara, the last colony on the African continent.
    The Federal Executive Council, FEC on June 1, 2022 gave approval for the Nigeria National Petroleum Corporation, NNPC to enter into an agreement with the Economic Community of West African States, ECOWAS for the construction of the Nigeria-Morocco Trans-Atlantic Gas Pipeline project. This gas pipeline, according to the announcement, is to pipe natural gas to fifteen West African countries and Morocco, and through Morocco to Spain in Europe.
    The pipeline will be 5660 km (3517miles) long and built in phases over twenty-five years. Even though the project is at an infant stage, we know there are issues involved that are bound to embarrass the government and people of Nigeria.
    Your Excellency, the proposed gas pipeline after traversing the entire coastline of West Africa (ECOWAS, Mauritania), would pass through the coastal waters of the Saharawi Arab Democratic Republic also known as Western Sahara (80 per-cent of it under Moroccan military occupation since 1975) before reaching the coastline of the Kingdom of Morocco. This is a deliberate ploy by the Moroccan occupier-state to compromise the principled position of Nigeria, the African Union (AU), the United Nations (UN), the International Court of Justice (ICJ) and the European Court of Justice on the Western Sahara conflict.
    We assert with all emphasis and convinced that if the project is implemented, there will be certain clearly avoidable damage and, needless embarrassment and disgrace to the government and people of Nigeria. This is particularly important in view of the role that Nigeria played in the National liberation of African people at the most crucial stage.
    Your Excellency, we recall, with an indelible memory, the role played by our country, Nigeria, by virtue of its principled defense of the rights of peoples in places like Zimbabwe, Mozambique, Guinea Bissau, Cape Verde, Namibia, Angola and South Africa to self-determination, gained a lot of respect universally. Our country’s contribution to the struggle of the people of Western Sahara for independence, was in 1984, at its highest and most principled stage when you were the Head of the Nigerian State. This earned our country tremendous respect all over the world and guaranteed Nigeria’s place in the history of African Liberation and the emancipation of colonized peoples in the world.
    However, this universal respect is being called to question because of recent developments in our country. There is growing conviction and evidence that the Kingdom of Morocco is determined to undermine and ridicule the Nigerian Government and people through its quest to join the Economic Community of West African States (ECOWAS), having killed the Arab Maghreb Union (AMU) by its belligerent and expansionist actions towards its neighbours.
    The aim of this letter to Your Excellency is to urge you to STOP the Nigeria/Morocco Trans-Atlantic Gas Pipeline Project, for it violates the sovereignty of the Saharawi people and is a trap that would irretrievably embarrass the people and government of Nigeria. It will call to question whether our country truly believes in the total liberation of Africa from colonial rule. Also, it will be a betrayal of the Saharawi people and Africa.
    In view of these, we are pleading with you in the interest of the Nigerian people and Africa to STOP the proposed Nigeria/Morocco gas pipeline project. This position will be perfectly in tune with your role as leader of the country that stood firm and so noble in the struggle of the African people to put an end to colonial rule in Africa.
    Your Excellency, this call is to urge you not to let Nigeria betray or even seem to betray the Saharawi people in putting to an end colonial rule in Africa. FREEDOM FOR THE PEOPLE OF WESTERN SAHARA IN THEIR OWN COUNTRY. This is the only path of human and historical justice. On this we stand.
    Please accept, Your Excellency, the assurances of the highest regard of the Nigerian Movement for the Liberation of Western Sahara (NMLWS).

    Prof. Adele Jinadu …………………………………
    Deputy President – NMLWS
    Dr. Oladipo Fashina………………………………..
    Coordinator- NMLWS
    Dr. Otunba Basirat Nahibi…………………………
    Co-Coordinator NMLWS
    Prof. Nuhu Yaqub…………………………………..
    Ex- Officio Member NMLWS
    Cde. Owei Lakemfa…………………………………
    Ex-Officio Member NMLWS
    Cde. Chris Uyot……………………………………..
    Ex- Officio Member NMLWS
    Cde. Nuhu Toro……………………………………..
    Ex- Officio Member NMLWS

    Cc: Honourable Minister of Foreign Affairs
    Honourable Minister of Defence
    Honourable Minister of State for Petroleum Resources
    Chief of Staff to the President of the Federal Republic of Nigeria.
    Group Managing Director of the Nigerian National Petroleum Corporation

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