NNPC, Morocco, ECOWAS Sign MoU On Gas Pipeline Construction
The Nigerian National Petroleum Corporation (NNPC) Limited, Economic Community of West African States (ECOWAS) and Morocco’s National Office of Hydrocarbons and Mines (ONHYM) have signed a memorandum of understanding (MoU) to kick off the construction of the Nigeria-Morocco Gas Pipeline (NMGP).
NewsBeatng reports that the signing took place in Rabat, Morocco, with Mallam Mele Kyari as a signee representing the NNPC, Dr. Amina Benkhadra as a signee for ONHYM and Mr. Sediko Douka, signing on behalf of ECOWAS.
The NMGP is a 5,600km gas pipeline that will travel the length of 13 African countries – Nigeria, Benin Republic, Togo, Ghana, Cote D’Ivoire, Liberia, Sierra Leone, Guinea, Guinea Bissau, Gambia, Senegal, Mauritania to Morocco.
In its statement, the NNPC said that the NMGP would originate from Brass Island in Nigeria and terminate at the North of Morocco. From Morocco, the pipeline will be connected to the existing Maghreb European pipeline that originates from Algeria all the way to Spain.
No timeline was given for the completion of the pipeline. This is an important aspect of the agreement and not giving out that information could be interpreted wrongly by stakeholders.
Industry watchers who spoke with NewsBeatng on the MoU argued that the NMGP project may likely be highly dependent on the completion of the Ajaokuta-Kaduna-Kano (AKK) pipeline, which gets its feed gas from the Escravos pipeline.
“The delays in the completion of the AKK as well as the Nigeria-Morocco pipeline is likely to transcend into the upcoming administration who will likely have its own priority projects. As far as this administration is concerned, this project is now on hold,”
” There is a challenge in terms of political will when it comes to projects of this kind. We have seen deals abandoned by incoming government because of how the terms of contracts were outlined by the previous administration. It is a good deal for Nigeria and Europe too, but if final investment decision (FID) is not concluded before the exit of this administration, the project would face bottlenecks”, said Analysts.
“ECOWAS and the push by the King of Morocco could help actualizing this gigantic project. If the EU stands up for it, then the project would work. If major financing would come from ECOWAS and other interested parties and the FID is concluded prior to the exit of this administration then we can see the continuity of the project,” Adu said.
NewsBeatng recalled that in December 2016 and in June 2018, Nigeria and Morocco signed a Memorandum of Understanding on the same Nigeria-Morocco Gas Pipeline but yielded no success.
Meanwhile, Oil and Gas analysts argued that the interest from Europe and the current drive for alternative gas supplies globally to tackle the energy crisis have made all the difference.
They argued that investors may prefer to invest in LNG facilities rather than this pipeline, because of the hostilities in countries along the way.
” Europe’s Energy security is key here in terms of this project. Qatar has mentioned that it can’t meet up with Europe’s natural gas demand if Russia is taken out of the market, so that is a major difference between then and now.
” Morocco depends on Algeria, Libya and Egypt for gas and they have always seen sub-Saharan gas supplies in exchange for proximity to the European gas market as their most realistic chance of being a liquefied natural gas player.
“This deal would favour Morocco more. Also, the ongoing supply disruptions in Europe and the resulting high prices have created a business case for the project. But I think this window of opportunity is narrow and won’t last long enough to warrant that sort of high-capital project”, said the Oil and Gas analysts.