Nigeria, Morocco Set Stage for Construction of Gas Pipeline

LAGOS (Capital Markets in Africa) – Nigeria and Morocco set the stage for the construction of a pipeline that will connect Nigerian gas to customers elsewhere in Africa and make it available to European buyers.

Nigerian President Muhammadu Buhari and King Mohammed VI of Morocco on Sunday signed an agreement in Rabat to start studies and consultations on the project, according to a statement by the Moroccan state agency MAP. The 5,660-kilometer (3,500-mile) conduit, which will follow onshore and offshore routes, could take as long as 25 years to complete, it said.

“We will now move to the detailed study phase of this project to gather all the necessary elements before proceeding to the financing and construction, “Amina Benkhadra, director-general of Morocco’s National Office of Hydrocarbons and Mines, told Moroccan state-television Monday.

While Nigeria has Africa’s largest proven gas reserves of more than 180 trillion cubic feet, its gas-producing companies prefer to export liquefied natural gas because of low domestic gas prices and an under-developed pipeline network. The West African nation is the world’s fourth-biggest LNG exporter behind Qatar, Australia and Malaysia, according to data compiled by Bloomberg.

Agreements will be signed with gas producers in Nigeria to establish the amount of gas that would be available for Europe, according to the MAP statement. Morocco and Nigeria will engage in talks with potential African and European buyers as well as international lenders to raise funding, it said, without disclosing the cost.

Morocco’s phosphate monopoly OCP also signed an agreement with the Nigeria Sovereign Investment Authority to develop an ammonia plant in Nigeria, the Nigerian presidency said in an emailed statement Monday. Ammonia is used to make fertilizer.