• Sunday, June 16, 2024
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Russia-Ukraine conflict: Nigeria-Morocco Gas Pipeline project to strengthen Nigeria – experts

UK gas: Day-ahead falls to near 10-month low on oversupply

Energy experts said the Russia and Ukraine conflict has shown that the conceptualized Nigeria–Morocco Gas Pipeline (NMGP) project could strengthen Nigeria’s economy as many European countries are shying away from Russia’s energy supply.

The analysts coherently believed that with the NMGP, Nigeria will be at an advantage with the current volatile movement in the energy world.

No thanks to the struggle between Russia and its neighboring Ukraine, and prior sanctions on the former by the U.S and some of its European allies.

Pedro Omontuemhen, a partner at PricewaterCoopers (PwC), stated that many European countries will be looking to get their gas supply elsewhere if Russia is no longer dependable.

He also indicated the project is a national project that is good for Nigeria’s foreign reserve and foreign income.

“Therefore when the economy is right then the project should be supported by any government that comes into power irrespective of parties, politics, and policies.”

Meanwhile, Bala Zakka, Technical Director-Drill Bits, Template Design Limited expressed disappointment on how long it took both countries to see the light.

“The alliance between Nigeria and Morocco as far as the gas pipeline is concerned is long overdue,” he stressed. Adding that “it is actually coming at the wrong time except if it is for future mutual benefits outside the immediate gas sales opportunities that the Russia-Ukraine crises have created.”

He said both countries could have gained immensely if this project had been conceived earlier.

“With the scuffle going on between Russia and Ukraine, European countries would have turned to Nigeria in particular if she had gone ahead with her Trans-Saharan gas pipeline project vision which was conceived more than four decades ago.

Read also: FG insist on promoting gas, renewed investments in the hydrocarbon for Africa energy sector

He however concluded that “the Nigeria-Morocco alliance to come up with a gas pipeline project is worthy of praise and encouragement because it will spur positive changes going forward.”

Elsewhere in Germany, there is a growing concern on actions to take as the country’s gas demand is majorly supplied by Russia.

Vijaya Ramachandran in her article for foreign policy: Germany Should Look to Africa for Gas, Not Russia, argued that Africa is the country’s best bet for an alternative source for gas.

She said Germany has boxed itself into a corner with its energy policies – most crucially, the replacement of nuclear power with Russian gas – and does not have a lot of options.

A statement that supports the recent threat by Alexander Novak, Russia’s Deputy Prime Minister, to stop natural gas exports to Germany via the Nord Stream 1 pipeline.

She further preferred that Berlin look to Nigeria, which has over 209 trillion cubic feet (tcf) of proven gas, and Tanzania.

“sourcing much more gas from Africa – while also helping African countries to meet their own development goals – is something Germany and the rest of Europe can no longer ignore,” she said.

In the meantime, the followings are what to know about the Nigeria-Morocco Gas Project.

What is the NMGP?

The NMGP project is an offshore and onshore gas pipeline project that aims to transport Nigerian natural gas resources to Morocco via West and North Africa.

As a continuation of the existing West Africa Gas Pipeline (WAGP) between Nigeria, Benin, Togo, and Ghana, it is intended to deliver Nigeria’s natural gas resources to 13 countries in West and North Africa.

The proposed 5,660-kilometer project received approval in December 2016 when King Mohammed VI visited President Muhammadu Buhari and the two agreed on the grandiose scheme to bring Nigerian gas northwards.

Instigating an agreement between the Nigerian National Petroleum Corporation (NNPC) and the Moroccan Office National des Hydrocarbures et des Mines – National Board of Hydrocarbons and Mines – ONHYM.

According to the security distillery, a student-run think tank, plans for the NMGP have moved forward in the time since.

How long and how much will the project take?

The NGMP will be spread over a 25-year period with an initial estimate of over $25 billion.

Zakka said the project is feasible with an average estimate of a billion-dollar for 25 years.

“Even if it cost $100 billion, it is worth the investment,” he said. “This could also help the country’s revenue.”

Who is funding the project?

Studies by the security distillery showed that Morocco has started providing financing or secured external funds.

The Islamic Development Bank (IsDB) agreed to fund 50 percent of the Nigeria-Morocco Gas Pipeline project’s Front-End Engineering Design (FEED) Study.

The multilateral development finance institution focused on Islamic finance will support the Moroccan contribution and contribute $15.5 million to the project’s financing through the “Service Ijara” operation.

For Nigeria, the IsDB will contribute $29.7 million to the FEED study, which aims to prepare the necessary studies for the gas pipeline and assist in making the final investment decision for the infrastructure project by 2023.

Also, the OPEC fund for international development in September 2021 approved a $14.3 million loan to Morocco for the project.

Meanwhile, the project construction is expected to be concluded in 2046, based on the 25-year estimate given in 2017.