This year, Amina Benkhadra, head of Morocco’s hydrocarbons and mining agency (ONHYM), said that an intergovernmental agreement (IGA) will be signed for a planned $25 billion gas pipeline between Nigeria and Morocco.
Benkhadra told Reuters on Monday that after the intergovernmental agreement, Nigeria will set up an authority for the pipeline made up of ministers from 13 countries that are taking part. This authority will be in charge of political and regulatory coordination.
The African Atlantic Gas Pipeline project was agreed upon ten years ago. It will run 6,900 km on a mix of offshore and onshore routes and have a maximum capacity of 30 billion cubic meters (bcm), with 15 bcm going to Morocco and the rest going to Europe.
The Economic Community of West African States (ECOWAS) supports the pipeline, which has finished its feasibility study and front-end engineering design (FEED) stages.
“After the agreement between the governments, Nigeria will set up a high authority for the pipeline that will bring together ministerial representatives from each of the 13 countries involved to coordinate politics and rules.
There will also be a project company in Morocco that is a joint venture between ONHYM and the Nigerian National Petroleum Company (NNPC). This company will be in charge of the planning, financing, and building of the project.
The pipeline would help Morocco become an energy bridge between Africa and Europe by increasing electricity generation and making it easier for industries and mining to grow. This would help West Africa’s economies become more connected.
“First, parts of the project would connect Morocco to gas fields in Mauritania and Senegal, and then connect Ghana to Cote d’Ivoire further south. Finally, Ghana would be connected to Nigeria’s gas fields.
Benkhadra says that the first gas from the first phases is expected in 2031. He also says that “the project does not rely on a single global final investment decision; each segment is designed to be developed as a ‘standalone system’ to allow for early value build-up.”
She did say, though, that while investors are still very interested in the project, no final funding commitments have been made. The project company will likely use a mix of equity and debt to pay for the project.
The project’s size, phased structure, and strategic location are all drawing a lot of interest.
“The project company will lead the financing structure and use a mix of equity and debt,” Benkhadra said.
