Page 5 - AfrOil Week 05 2021

AfrOil COMMENTARY AfrOil

These regions are home to violent terrorist reserves of their own. Senegal and Mauritania,
groups such as the Islamic State in West Africa for example, have discovered enough gas in
(better known as Boko Haram) and Al Qaeda in Grand Tortue/Ahmeyim (GTA), a group of off-
the Islamic Maghreb (AQIM). shore blocks that straddles the maritime border
between the two countries, to support an LNG
NMGP ambitions project. They may lobby for the right to feed
Some years later, Nigerian authorities came out their own production into the NMGP system
in favour of a different pipeline project – namely, in the hope of joining Nigeria and Morocco in
NMGP. exporting gas to Europe.
In December 2016, state-owned Nigerian For another, it is almost certain that the $25bn
National Petroleum Corp. (NNPC) signed cost estimate is too low – despite ECOWAS’ sug-
an agreement with its Moroccan counterpart, gestion in late 2020 that Nigeria and Morocco
Office National des Hydrocarbures et des Mines explore the possibilities for synergy with West
(ONHYM), on the construction of a massive African Gas Pipeline (WAGP), the operator of
system of offshore pipelines connecting every an existing offshore pipeline network linking
state along Africa’s western coast. It envisioned Nigeria, Benin, Togo and Ghana. There are
a 5,660-km network capable of pumping Nige- many factors that could drive the final price up,
rian gas to Benin, Togo, Ghana, Côte d’Ivoire, including but not limited to legal battles with
Liberia, Sierra Leone, Guinea, Guinea-Bissau, environmental groups, marine security meas-
Gambia, Senegal, Mauritania and Morocco and ures to protect the NMGP system from piracy,
then extending across the Mediterranean into the technical and logistical difficulties inherent
Spain, thereby enabling exports of West African in subsea pipeline construction. Nigeria and
gas to Europe. Meanwhile, there are questions about Morocco may
Since then, NNPC and ONHYM have made whether gas demand is sufficient to support a
some progress. They launched a feasibility study project of this scale. Currently, Nigeria and other not be able to
in August 2017 and wrapped it up in January West African states are still working to recover
2019, saying they had calculated the price tag for from the damage they sustained as a result of the make a strong
building the pipeline system in multiple stages coronavirus (COVID-19) pandemic, which has
over a period of 25 years at $25bn. Also in Jan- had a dramatic (and negative) impact on global case for spending
uary 2019, they signed a contract with Penspen energy consumption and pricing. As a result, so much money
(UK) on first-stage front-end engineering and they will have to recalibrate their forecasts for
design (FEED) work. future gas demand in the region. Additionally, on such a
Later in the same year, the two national oil European gas consumption is likely to decline
companies (NOCs) presented their plans at a over the long term as a result of efforts to reduce large-scale and
special meeting of the Economic Community of net carbon emissions to zero. This means that
West African States (ECOWAS). In 2020, they there may not be room for large volumes of complex project
moved on to the second stage of FEED work African gas on the European market in 25
and continued to seek ECOWAS’ support for years, especially since European consumers
the project. And now, as noted above, the lead- will already have access to many other supply
ers of Morocco and Nigeria have reiterated their sources.
support for NMGP. Under these circumstances, NMGP’s
chances of success do not appear to be high.
Reasons for doubt Certainly, Nigeria and Morocco could retool
These are all positive signs, but they do not their plan, eliminating the goal of launching
amount to concrete evidence of progress. That pipeline exports to Europe and focusing instead
is, they don’t demonstrate that NNPC and on African gasification and electrification initia-
ONHYM are ready to start laying down pipe – tives of the type espoused by the African Energy
or even to start making plans to lay down pipe. Chamber (AEC). Even if they did so, however,
There are plenty of good reasons to hesi- they might not be able to make a strong case for
tate. For one thing, Nigeria’s hope of becoming spending so much money on such a large-scale
a major supplier of gas to other states in West and complex plan – especially when Nigeria is
Africa and Europe may not sit well with other not the only party that can supply gas to West
West African countries that have large gas African consumers. ™

.com)
est Africa Gas Pipeline (Image: W
AGPCO
ECOWAS has pointed to the possible benefits of a tie-up with the West Africa Gas Pipeline (Image: WAGPCO.com)
ECOW
AS has pointed to the possible benefits of a tie
-up with the W
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