Nigeria-Morocco gas pipeline project hits fresh hurdles
The planned Nigeria-Morocco Gas Pipeline (NMGP) is currently stewed in fresh hurdles which will hamper its delivery date, a report has said
The report said at present, the NMGP faces considerable commercial, technical, legal and financial challenges that make it unlikely to materialise in the short or medium-term.
Political considerations, the report said, add yet another layer of uncertainty, especially in the lead-up to the February 2019 Nigerian presidential elections that could see a shift in political capital for the project. The envisioned pipeline route is poised to have high exposure to political risks, according to the report.
FEED studies for the planned Nigeria-Morocco Gas Pipeline (NMGP) started in early January 2019, with the selection of British engineering company Penspen. UK-based Penspen has been selected by the Nigerian National Petroleum Corporation (NNPC) and Morocco’s Office National des Hydrocarbures et des Mines (ONHYM) to execute phase 1 of the front-end engineering and design (FEED) study for the planned NMGP.
The development follows on the feasibility study completed by Penspen in July 2018 after the governments of Nigeria and Morocco agreed to build the 5,660km-long pipeline in December 2016. Following the recommendations of feasibility studies, it was decided that the NMGP route would follow a combined onshore/offshore route along the West African coast, for political, legal and security reasons.
Phase 1 of the FEED study will entail an in-depth evaluation of gas demand and supply mechanisms in the West African region, as well as negotiations with countries whose sovereign waters would be crossed by the pipeline. In total, 13 countries will be involved: Nigeria, Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea Bissau, The Gambia, Senegal, Mauritania and Morocco.
The report said the pipeline could boost Nigeria’s export potential to European markets as well as help reduce gas flaring in the country, and allow the acceleration of electrification projects (via gas-to-power initiatives) across West Africa.
At the time of the agreement’s signature, Morocco’s phosphates giant OCP signed an agreement with Nigeria’s Sovereign Investment Authority to build an industrial platform for the production of ammonia and derivatives which would use gas from the pipeline as a feedstock.
According to report, the NMGP faces considerable commercial, technical, legal and financial challenges that make it unlikely to materialise in the short- or medium-term. The first and most obvious obstacle lies with the sheer number (thirteen) countries which would have to agree before the project can move forward.
“As a reference, the West African Gas Pipeline (WAGP), which involved only four countries (Nigeria, Benin, Togo, Ghana), took 12 years between the first feasibility study and the start-up of commercial operations with first gas delivered to Ghana in 2008.
“A comprehensive political, legal, technical and financial framework had to be defined between the four countries before the project could materialise. It is very likely that the amount of time needed to reach agreements with all countries involved in the NMGP project be even longer, which would position it in a very long-term horizon (2035-2040)
Source: Energy Mix ReportFollow us on social media