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.