Page 4 - DMEA Week 17 2022

DMEA COMMENTARY DMEA

Worley wins NMGP FEED contract

A new contract award for Nigeria-Morocco Gas Pipeline services raises questions
about the technical, financial and political obstacles facing competing projects

AFRICA ON April 26, Worley, an Australian indus- understandable, but some of them have direct
trial engineering company, issued a statement bearing on whether NMGP is truly viable.
announcing that it had won a contract for main
WHAT: front-end engineering design services related to What’s left unsaid
Worley has been awarded a planned natural gas pipeline in Africa. Specifi- One of those omissions is the exact terms of the
a FEED services contract cally, it said it had agreed to provide FEED Phase contract. More specifically, Worley does not say
for the NMGP project. II services for the Nigeria-Morocco Gas Pipe- which organisations awarded the contract, how
line (NMGP), an offshore gas transport system much the contract was worth, or what the scope
WHY: running for more than 7,000 km past the coasts of work is.
This scheme may run of 13 African states to Morocco, where it could It is not unusual for a contractor to leave some
up against a competing connect to the Gaz Maghreb-Europe (GME) details out of a press release, especially those
project, the Trans-Sahara pipeline to Spain. related to the value and scope of a contract. And
Gas Pipeline (TSGP). The Australian company said that overall there are some details that can be gleaned from
FEED services would be managed by Intecsea, documents published by the Islamic Develop-
WHAT NEXT: its offshore engineering consultancy arm based ment Bank (IsDB), which is reportedly provid-
Pre-existing tensions in The Hague, while the company’s team in ing more than $15mn in funding for the FEED
between Morocco and London would be responsible for work related services contract.
Algeria could put Nigeria to the onshore FEED scope, the environmental But it is a bit unusual not to name the party
in the position of having and social impact assessment (ESIA) and land awarding the contract up front. It also seems
to choose between the acquisition studies (LAS). somewhat out of the ordinary to state that
pipelines. Meanwhile, it said, other Worley subsidiar- NMGP is “being promoted [emphasis added] by
ies will support other aspects of the contract, Office National des Hydrocarbures et des Mines
including administration, project delivery, initi- (ONHYM) of Morocco and Nigerian National
atives related to promoting local electrification Petroleum Corp. (NNPC) of Nigeria” without
and energy self-sufficiency and the climate-re- specifying whether these state-run companies
lated goals such as carbon emissions reduction, intend actually to lead the project.
the use of renewable energy and sustainability.
This green slant may seem a bit ironic, given Inevitable complications
that the contract puts fossil fuels front and centre. And this is where the other omissions become
As the statement notes, NMGP is slated to relevant. That is, Worley’s statement may have
become “the longest offshore pipeline in the been worded oddly because it was designed to
world and the second-longest pipeline overall”, leave certain issues in the background. Those
but it is perhaps not surprising from a public include considerable technical, financial and
relations perspective. After all, “sustainability” political complexity.
and “net zero” are among the first words that From a technical standpoint, NMGP is
appear on Worley’s website. bound to be complicated.
The company also makes a point of mention- Connecting Nigeria with Benin, Togo,
ing one of the arguments in favour of its project Ghana, Cote d’Ivoire, Liberia, Sierra Leone,
– namely, the major disruptions to world energy Guinea, Guinea-Bissau, Gambia, Senegal,
markets that have followed Russia’s invasion of Mauritania, Morocco, before running across
Ukraine in late February. the Mediterranean to Spain would involve the
That is, it notes the fact that Europe in par- most extensive offshore pipe-laying operation
ticular is keen to find new sources of gas, even in the world, and part of the pipeline would pass
though it does so indirectly, without mentioning through waters where piracy is common, includ-
the war in Ukraine, the EU’s decision to phase ing but not limited to the Gulf of Guinea. From
out imports of Russian gas or EU sanctions on a financial perspective, offshore pipeline con-
trade with Russia. struction is always expensive, and loans may be
But as interesting as it may be to consider difficult to obtain because of concerns about risk.
how much time a statement about a gas pipe- The offshore route was proposed in 2019,
line spends talking about climate-related top- with plans suggesting it would be built in stages
ics and current events, it is just as interesting over 25 years as an extension of the existing 678-
to observe what the statement does not say. In km West Africa Gas Pipeline (WAGP) – which
this case, there are definitely a few topics that runs from Nigeria to western Ghana via Benin
Worley does not mention. These omissions are and Togo.

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