Page 5 - AfrOil Week 17 2022

AfrOil COMMENTARY AfrOil

The company also makes a point of mentioning the disputed territory of Western Sahara, as it
one of the arguments in favour of its project – shows no border between the two. This is not
namely, the major disruptions to world energy likely to escape the notice of Algeria, which is
markets that have followed Russia’s invasion of also an IsDB member state.
Ukraine in late February. Algeria has strongly opposed Morocco’s
That is, it notes the fact that Europe in par- assertions of sovereignty over Western Sahara.
ticular is keen to find new sources of gas, even What is more, it has also held its own talks with
though it does so indirectly, without mentioning Nigeria on the construction of a different pipe-
the war in Ukraine, the EU’s decision to phase line that would bring West African gas to Europe
out imports of Russian gas or EU sanctions on – the Trans-Saharan Gas Pipeline (TSGP),
trade with Russia. which would run northward through Nigerian
But as interesting as it may be to consider territory and eastern Niger to Algeria’s Hassi
how much time a statement about a gas pipeline R’Mel gas field.
spends talking about climate-related topics and At Hassi R’Mel, TSGP could then connect to
current events, it is just as interesting to observe existing gas pipelines that pump Algerian gas to
what the statement does not say. In this case, Europe, such as the Medgaz link to Spain or the
there are definitely a few topics that Worley does TransMed link to Italy.
not mention. Proposals for the trans-Saharan route were
These omissions are understandable, but first aired in the 1980s, but the project finally
some of them have direct bearing on whether made some serious headway earlier this year.
NMGP is truly viable. In February, the governments of Algeria, Niger
and Nigeria signed a document called the Dec-
What’s left unsaid laration of Niamey outlining their plans for
One of those omissions is the exact terms of the TSGP. This event led some observers to describe
contract. More specifically, Worley does not say NMGP as essentially defunct, even though
which organisations awarded the contract, how Nigerian and Moroccan officials had discussed
much the contract was worth, or what the scope that project with each other just a few months NMGP could run
of work is. earlier. up against the
It is not unusual for a contractor to leave
some details out of a press release, especially Potential conflicts mutual hostility
those related to the value and scope of a contract. It is not at all clear that Nigeria can pursue both
And there are some details that can be gleaned of these projects without conflict. between Morocco
from documents published by the Islamic This is not for any lack of resources. The
Development Bank (IsDB), which is reportedly country’s proven reserves of associated and and Algeria over
providing more than $15mn in funding for the natural gas currently stand at 200 trillion cubic Western Sahara
FEED services contract. feet (5.7 trillion cubic metres), so they are large
But it is a bit unusual not to name the party enough, theoretically, to keep both NMGP and
awarding the contract up front. It also seems TSGP running at their full design capacity of
somewhat out of the ordinary to state that 30bn cubic metres per year each for a total of 95
NMGP is “being promoted [emphasis added] by years.
Office National des Hydrocarbures et des Mines But as noted above, there is a certain amount
(ONHYM) of Morocco and Nigerian National of mutual hostility between Morocco and Alge-
Petroleum Corp. (NNPC) of Nigeria” without ria. These two neighbouring states oppose each
specifying whether these state-run companies other on the issue of Western Sahara, and their
intend actually to lead the project. disagreements on this front have sometimes
caused problems for third parties. Spain, for
Inevitable complications example, had to figure out how to compensate
And this is where the other omissions become for a reduction in gas supplies last autumn after
relevant. Algeria halted shipments through the GME
That is, Worley’s statement may have been pipeline, which crosses Moroccan territory on
worded oddly because it was designed to leave its way to the Iberian Peninsula. It is not diffi-
certain issues in the background. Those include cult to imagine Algiers applying similar logic
considerable technical, financial and political and insisting that Abuja disavow TSGP or risk
complexity. NMGP, in which case neither Nigeria (the
From a technical standpoint, NMGP is intended exporter) nor Europe (the intended
bound to be complicated. It would involve the market) nor any of the transit states would
most extensive offshore pipe-laying operation benefit.
in the world, and part of the pipeline would Again, though, Worley’s statement does not
pass through waters where piracy is common, mention these possibilities. This is not necessar-
including but not limited to the Gulf of Guinea. ily surprising, as contractors cannot be expected
From a financial perspective, offshore pipeline to mention all of the obstacles to their projects
construction is always expensive, and loans may in statements about their initial contract awards.
be difficult to obtain because of concerns about However, it is worth considering as discus-
risk. sions of these projects move forward – and as
Meanwhile, there are certainly political observers attempt to assess which efforts to
matters in play. Worley’s statement includes a bring West African gas to Europe are most likely
graphic that acknowledges Morocco’s claim to to succeed. ™

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