Nigeria-Morocco gas pipeline inches forward, final investment decision expected in December

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The Nigerian National Petroleum Company (NNPC) has announced a key update on the long-awaited Nigeria-Morocco Gas Pipeline (NMGP) project. According to NNPC Group Chief Executive Officer (GCEO) Mele Kyari, a Final Investment Decision (FID) on the $25 billion pipeline is expected in December 2024.

Kyari revealed this while speaking during a Leadership Dialogue Session at the ongoing CERAWeek Conference in Houston, United States on Tuesday.

According to him, the NMGP which is at an advanced stage, will create a pipeline that will pass through thirteen African countries to Europe, adding that the FID for the $25bn pipeline project will be taken by December.

The NNPC Limited’s GCEO also advocated for a differentiated approach to attaining energy transition for the African continent.

“The world has seen all the challenges thrown up recently by geopolitical events. It is clear that before the energy transition, countries must first attain security of energy supply in their countries. You cannot talk about energy security when it is not even available. In most sub-Saharan Africa, 70 per cent of the population doesn’t have access to clean cooking fuels. Therefore, you must fill the supply gap first,” the GCEO stated.

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This announcement signifies progress for the ambitious project, which aims to transport Nigerian gas through thirteen African countries to Europe. The NMGP has been in the discussion stage for several years, facing challenges such as securing financing and navigating complex international agreements.

Kyari’s statement suggests that significant progress has been made on these fronts. The December timeframe indicates that key stakeholders, including participating countries and potential investors, are nearing an agreement on the project’s viability and financial structure.

However, some analysts remain cautious. The December deadline could be seen as an optimistic target, with potential delays arising from ongoing negotiations or unforeseen technical hurdles. Additionally, the global energy landscape remains fluid, with the ongoing war in Ukraine impacting energy prices and potentially influencing investor decisions.

The success of the NMGP hinges on several factors. First, ensuring sufficient gas reserves in Nigeria to meet domestic needs as well as export commitments will be crucial. Second, the project’s economic viability requires competitive gas prices that are attractive to European buyers. Finally, political stability and security throughout the pipeline’s path across multiple countries will be essential for its successful construction and operation.

Despite the challenges, the NMGP has the potential to be a game-changer for Nigeria, Morocco, and the wider West African region. The project could generate significant revenue for Nigeria, boost regional economic integration, and provide Europe with a new source of natural gas.

In the coming months, it will be important to monitor developments surrounding the FID. The December deadline serves as a key benchmark, and any delays or changes to the timeline could signal potential roadblocks for the project.