Officials from the Moroccan National Office of Hydrocarbons and Mines (ONHYM) visited Washington DC in early May in an effort to secure financing for one of the most ambitious energy infrastructure projects ever attempted in Africa.
The Nigeria-Morocco Atlantic Gas Pipeline, to be spearheaded by the ONHYM along with the Nigerian National Petroleum Company (NNPC), would span 13 countries along the coast of West Africa. The project would include both onshore and offshore sections to enable gas produced in multiple countries to be exported to Spain and the wider European market.
The 6,900km pipeline, also known as the “Atlantic African Gas Pipeline”, is not intended as purely trans-continental export infrastructure, however. Half of the 30bn cubic metre per year capacity is to be earmarked for domestic markets, helping to boost electricity access and fuel industrial growth.
Getting the project off the drawing board will be a major test for Nigeria, Morocco and the wider region. The price tag is conservatively estimated at $25bn, while the timeline for completing all stages of construction would extend over more than 20 years.
Competing gas routes
Nigeria has long viewed pipeline infrastructure as a key tool in strengthening its gas exports to Europe. In 2022 it signed a deal with Algeria and Niger to press ahead with a Trans-Saharan Pipeline. The realism of that project appears dubious owing to security challenges and diplomatic tensions, however, and a clear timeline for beginning construction is yet to materialise.
An alternative pipeline route that skirts the coast is a “less risky, more viable option,” says Agwu Ojowu, lead advisor at consulting firm Africa Practice. He notes that the project would allow several West African countries to secure additional revenue streams from gas exports.
A key advantage is that an Atlantic route could be built in stages, with gas beginning to flow through the first sections years before the entire vision is complete.
The first phase, linking gas fields off the coast of Senegal and Mauritania to the existing Maghreb-Europe pipeline that runs through Morocco, is intended to become operational by 2031. The full route is tentatively scheduled to be operational by 2046 – although sticking to this timetable will require multiple planning and financing hurdles to be overcome.
Financing hurdles
A fundamental question over the project is whether there is even demand for it in Europe, the key market for half the gas that would flow through the pipeline.
European governments have been eager to source gas from Africa in recent years as an alternative to Russian supplies. From an energy security perspective, however, this does not necessarily translate into support for pipeline infrastructure. Sourcing gas through pipelines would risk locking Europe into dependence on particular suppliers, whereas importing liquefied natural gas (LNG) in ships gives more flexibility to switch import partners.
And gas demand is already in decline in Europe as the continent focuses on switching to renewable power. According to the Institute for Energy Economics and Financial Analysis, European gas imports will decline by a further 25% by 2030.
Although some European officials have expressed interest in the project, neither the European Commission nor any national government in Europe has made firm commitments.
Ojowu says a “tricky situation” is posed by the EU’s methane regulations, which, from 2030, will enforce strict rules on methane intensity. Gas production in Nigeria is highly methane-intensive at present, suggesting the country would be heavily penalised under the EU framework. Ojowu suggests, though, that a potential “win-win” could emerge if European financing for a pipeline can be used to incentivise African producers to speed up measures to abate the release of methane during gas production and transport.
With European financing uncertain at best, Moroccan officials are making an increasingly visible effort to unlock funding from other sources. The OPEC Fund for International Development and the Islamic Development Bank have already helped finance engineering and design studies, and the UAE has expressed public support.
Meanwhile, the ONHYM is stepping up efforts to court US institutions, including the US Development Finance Corporation.
Under the second Trump administration the US has taken a proactive role in helping to finance oil and gas developments in Africa. For example, the US Export-Import Bank approved a $4.7bn loan for TotalEnergies’ Mozambique LNG project on 13 March.
It is less clear whether the US is serious about helping to finance a project that would directly compete with American gas in serving the European market.