Nigeria Eyes 3 Bcf/d Gas Pipeline To Morocco After Relations Sour  With Niger


Nigeria Eyes 3 Bcf/d Gas Pipeline To Morocco After Relations Sour  With Niger

Preferred Trans-Saharan pipeline threatened by Niger coup

5,600-km Nigeria-Morocco pipeline to traverse 13 countries

Nigeria holds 203 Tcf of gas but output, exports still lagging

Gas-rich Nigeria is looking to fast-track the construction of a 5,600-km gas pipeline to Morocco, capable of supplying Europe, after a total breakdown in diplomatic relations with Niger scuttled the Trans-Sahara pipeline to Algeria.

Nigeria, Africa’s biggest oil producer but a marginal gas player, has declared the 2020s a “decade of gas.” The country, which is sitting on an estimated 203 Tcf of proven natural gas reserves, hopes to become a major supplier to Europe as the continent shifts away from Russian gas.

However, LNG exports to Europe fell 22.7% in 2023, according to S&P Global Commodity Insights data, due partly to insufficient deepwater gas projects and export infrastructure.

Until recently, officials expected the $13 billion Trans-Saharan gas pipeline as the solution. Stretching 4,128 km from Warri in southern Nigeria through Niger to Algeria’s Hassi R’Mel gas hub and first mooted in 2002, the conduit would carry 30 Bcm of gas daily, according to the three countries.

However, relations between Nigeria and Niger have been frozen since a July 2023 coup, when the latter’s president Mohammed Bazoum was ousted, prompting punitive economic sanctions by the regional bloc ECOWAS, of which Nigeria is the de-facto leader.

The sanctions froze state assets and stopped business activity in the longstanding Western ally, which boasts significant uranium and oil reserves. In late January, Niger, Burkina Faso and Mali — all led by military juntas — announced they would quit ECOWAS altogether, threatening $150 billion a year of regional trade.

Analysts told S&P Global that the breakdown in relations and Niger’s potential departure from ECOWAS would all but kill the Trans-Saharan pipeline, with much of its capex earmarked for Niger. “Diplomatic relations between Niger and the Nigerian government are zero,” said Uwadiae Osadiaye, an analyst at Lagos-based FBNQuest.

Instead, Osadiaye said, Abuja now favors another route for its gas: the 3 Bcf/d Nigeria-Morocco pipeline snaking across 13 West African countries.

On Jan. 24, Nigerian minister of state for gas, Ekperikpe Ekpo, flew to Rabat “in a bid to fast-track the process of achieving the Final Investment Decision on the Nigeria-Morocco gas pipeline,” according to a statement from state-owned Nigeria National Petroleum Corp. Ekpo held discussions with Moroccan minister of energy transition and sustainable development, Leila Benali.

“Both parties emphasized the strategic importance of the project to the two countries and the entire African continent and the need to drive it to completion expeditiously in line with the objective of stemming energy poverty on the African continent,” NNPC said. “The project, among other things, will help drive the monetization of Nigeria’s gas resources . . . and promote economic and regional cooperation among African Countries.”

The talks follow a 2017 bilateral cooperation agreement and a 2022 Memorandum of Understanding on the ambitious project, which would traverse Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal and Mauritania, terminating in Morocco with a spur to Cadiz in Spain.

It would be bolted onto the existing 100 MMcf/d West African Gas Pipeline linking Nigeria, Benin, Togo and Ghana. All participating African nations have expressed interest in the project, and several have signed MOUs of their own.

However, analysts said such a project is years away, if it happens at all.

“The Nigerian government has published several statements over the past few months relating to oil and gas sector investment, likely seeking to strengthen [president Bola] Tinubu’s image as business-friendly, in line with recent statements that Nigeria is ‘ready to do business,'” said Ida Hockerfelt, a senior research analyst at S&P Global. “This recent announcement on fast-tracking the FID for the pipeline is likely a similar attempt to highlight government efforts, particularly concerning gas. However, there are still a number of issues remaining to be solved, not least relating to financing.”

Early estimates put the cost of the pipeline at $25 billion.

Gas woes

With limited gas projects and export infrastructure, Nigeria has found itself unable to satisfy increased gas demand from the European continent, which is moving away from Russian gas, just as Nigerian oil production falls due to underinvestment, technical issues and crude theft.

Nigeria exported just 7 million mt of LNG to Europe in 2023, according to data from S&P Global, down from 9.06 million mt in 2022.

Meanwhile, North African countries, including Algeria and Libya, have become major gas suppliers to Europe. Algeria, which also supplies piped gas to Italy, saw LNG exports to Europe rise by 23% in 2023.

Source:  S&P Global Commodity Insights data,



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