Nigeria’s state oil company said a decision to invest in a $25 billion natural gas pipeline from Nigeria to Morocco, which could carry fuel to Europe, would be made next year.
The Nigerian National Oil Company and Morocco’s National Hydrocarbon and Mines Authority last month signed a letter of intent to collaborate to bring plans closer to reality. The pipeline will connect Nigeria with the EU countries via Morocco, which is an important profit-making initiative for NNPC amid Europe’s increasing demand for new sources of gas due to the political situation.
The Nigeria-Morocco pipeline project has significant potential to support Europe in phasing out Russian gas, which is currently a high priority in European politics.
The current pipeline energy map in Europe shows more than 50% of the European Union’s gas needs come from a single supply source and the current status quo poses both a political and economic threat to Europe.
A final decision on the investment will be made next year, and funding discussions continue without revealing the entities interested in supporting a 3,840-mile pipeline that will deliver gas to 11 countries along the African coast on its way to Morocco before connecting to Spain or Italy.
An agreement on the main terms of the deal or a protocol of intent was also signed by the Economic Community of West African States.
The ambitious Nigeria-Morocco gas pipeline project is extremely capital intensive, as it requires a total investment of almost $25 billion and will take place in phases for the first part of which they plan to spend three years, and the remaining five years.
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While at the last meeting the construction period was determined as a whole 25 years. Gas exports from the West African nation are now handled by Nigeria LNG Ltd., a joint venture between NNPC and international energy companies including Shell Plc and Eni SpA.
Earlier this year, the project received significant funding from the Organization of the Petroleum Exporting Countries (OPEC). The investment went towards funding the project’s initial feasibility study, also known as the Preliminary Engineering Design (FEED).
Experts argue that the project promises significant socio-political benefits for the African continent.
The pipeline will pass through 11 African countries, providing a reliable and stable source of gas that will improve the continent’s prospects for hosting businesses and contribute to social and economic development.
Nigeria has the largest gas reserves in Africa, amounting to about 200 trillion cubic feet. This analysis was obtained from 61 producers who were required to submit their 2021 Annual Report on National Reserves. A huge part of the gas is not used and is flared or re-injected into oil wells.
The government, in turn, plans to monetize much more of this gas, primarily for domestic use, as well as for export, to replace oil as the country’s main commodity.
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