OPEC Fund for International Development (OFID) is set to contribute US$ 14.3M to fund the implementation of the second phase of the NMGP (Nigeria-Morocco Gas Pipeline) project’s Front End Engineering Study (FEED).
This is after the intergovernmental development finance institution established back in 1976 by the Member States of the Organization of the Petroleum Exporting Countries, signed a financing agreement with Morocco. The agreement was particularly signed by Nadia Fettah, the North African country’s minister of economy and finance, OPEC managing director, Abdulhamid Al khalifa, and the National Office of Hydrocarbons and Mines (ONHYM) managing director, Amina Benkhadra.
With this agreement, OPEC Fund strengthens its financial cooperation links with Morocco and contributes to the Kingdom’s economic and social dynamics by supporting the NMGP (Nigeria-Morocco Gas Pipeline) project, which is an example of South-South collaboration.
Worley to carry out the 2nd phase of the NMGP project’s FEED
WorleyParsons Limited, an Australian engineering company which provides project delivery and consulting services to the resources and energy sectors, and complex process industries, that was branded as Worley after completing the acquisition of Jacobs’ Energy, Chemicals & Resources division, will carry out the second phase of the Islamic Development Bank (IDB) co-funded NMGP (Nigeria-Morocco Gas Pipeline) project’s Front End Engineering Study (FEED).
Worley’s offshore engineering consultant subsidiary, Intecsea, situated in The Hague, Netherlands, will be in charge of the entire FEED services which the development of a project implementation framework as well as engineering survey monitoring.
The company’s team in London, UK, will be responsible for the onshore FEED scope, as well as the Environmental and Social Impact Assessment (ESIA) and Land Acquisition Studies (LAS), with the help of Worley’s network of offices in Africa and its global integrated delivery group in Hyderabad, India.
Worley’s consulting business, Advisian, will look into speeding electrification and the possibility of the region’s energy self-sufficiency.
Nigeria-Morocco Gas Pipeline (“NMGP”) project overview
The Nigeria-Morocco Gas Pipeline (“NMGP”) is a new regional onshore and offshore gas pipeline that is intended to deliver natural gas resources of Nigeria to 13 countries in the West and North Africa as a continuation of the existing West Africa Gas Pipeline (“WAGP”) between Nigeria, Benin, Togo, and Ghana.
Starting from Nigeria, the 5,660 kilometres long NMGP will pass through Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, and Mauritania, to end at Tangiers, a Moroccan port on the Strait of Gibraltar, with a possible extension to Europe through Spain.
The Nigeria-Morocco Gas Pipeline Project is estimated to cost US$ 25bn and it will be completed in stages over 25 years.
The project falls in line with the “Decade of Gas Master Plan” that Nigeria’s President Muhammadu Buhari launched in 2020. The master plan seeks to bolster Nigeria’s gas production and gas exports.
On the Moroccan side, this landmark project is part of the South-South cooperation upheld by King Mohammed VI. It is expected to create a competitive regional power market and benefit all West African people, countries, and their economies.
The Nigeria-Morocco Gas Pipeline Project was proposed in December 2016 following the signing of an agreement between the Nigerian National Petroleum Corporation (NNPC) and the Moroccan Office National des Hydrocarbures et des Mines (ONHYM) or rather the National Office of Hydrocarbons and Mines.
In August, NNPC and ONHYM began conducting a feasibility study for the project.
Additionally, the African Petroleum Producers Organisation (APPO) is seeking to mobilize about US $2bn of resources to fund critical areas of infrastructural collaboration within Africa. APPO made up of 18 member oil producing countries, accounts for nearly 95% of Africa’s oil production and at least 13% of world production.
In March, the front-end engineering & design entered the second phase.
Commitment to construction of Nigeria-Morocco gas pipeline
The Royal Cabinet of Morocco has revealed that King Mohammed VI and Muhammadu Buhari, the President of the Republic of Nigeria have recently affirmed their commitment to the construction of the Nigeria-Morocco gas pipeline.
The Nigeria-Morocco Gas Pipeline was conceived back in December 2016 through 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).
The pipeline will connect Nigerian gas to every coastal country in the West Africa region i.e. Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, and Mauritania, and end at Tangiers, Morocco, a distance of about 5,660 kilometres.
Basically, it will be an extension of the existing West African Gas Pipeline, which already connects Nigeria with Benin, Togo, and Ghana.
The gas pipeline will also be connected to the existing infrastructure in order to serve Spain through Cádiz.
Progress made so far
Reportedly, in August 2017 the NNPC and ONHYM had begun a feasibility study for the pipeline. The study was completed in January 2019, and in the same month, the two countries contracted with Penspen Engineering company to conduct the first phase of front-end engineering & design.
By March last year, the front-end engineering & design had entered the second phase.
The project is planned to be completed in stages over a 25 years period.
Expectations for the project
The Nigeria-Morocco gas pipeline is expected to improve access to energy across the West Africa region.
This will help address one of the region’s most significant barriers to development, which is the lack of affordable energy, and consequently facilitate the expansion of sectors ranging from industry to food processing and fertilizers, and improve the competitiveness of exports amongst the African countries.
In addition, the project will strengthen energy exports to Europe.
Construction of Nigeria-Morocco gas pipeline kicks off
Construction of the Nigeria-Morocco gas pipeline has kicked off. Chief Operating Officer of the gas and power of the Nigerian National Petroleum Corporation (NNPC), Yusuf Usman announced the start of the project.
The commencing of the project follows the recent commitment to the construction by Morocco’s President King Mohammed VI and Muhammadu Buhari, the President of the Republic of Nigeria. The Nigeria-Morocco Gas Pipeline was conceived in 2016 through an agreement between the NNPC and the Moroccan Office National des Hydrocarbures et des Mines (National Board of Hydrocarbons and Mines) (ONHYM).
“Feasibility studies have been completed, paving way for the start of a kind of vision that is set to lift Africa,” said Mr Usman.
Access to energy across the West Africa region
The project falls in line with the “Decade of Gas Master Plan” that Nigeria’s President Muhammadu Buhari launched in 2020, which seeks to bolster Nigeria’s gas production and gas exports despite a global transition to clean energy.
On the Moroccan side, this landmark project is part of the South-South cooperation upheld by King Mohammed VI. It is expected to create a competitive regional power market and benefit all West African people, countries and their economies. The project sets to add to Morocco’s growing list of African trade deals, securing its position as an African economic leader.
Nigeria’s Petroleum Minister, Timipre Sylva, announced that the government of Nigeria contemplates supplying Europe with their gas using the Nigeria-Morocco gas pipeline.
Morocco was planning to create a public company to manage the scheme involving the supply of natural gas from Nigeria through a pipeline that will cross over several African countries.
The Moroccan Energy Ministry, which will be in charge of developing domestic gas infrastructure and networks in the North African Arab country also applauded plans for the company creation.
“Arrangements are ongoing to set up a company for gas network development in Morocco and to supervise the scheme to construct a gasoline from Nigeria, which will become Africa’s largest gas infrastructure project,” Morocco’s Economy and Finance Ministry stated.
Morocco concludes plans for Morocco-Nigeria Gas Pipeline Project
The Government of Morocco recently announced that it has concluded its plans/preparations for the development of the proposed Morocco-Nigeria Gas Pipeline (MNGP) or the Nigeria-Morocco Gas Pipeline (NMGP).
The country also mentioned that it has set up a downstream division of the Office National des Hydrocarbures et des Mines (ONHYM), a public organization representing the interests of the Kingdom of Morocco in the field of Exploration and Production of Hydrocarbons and Mining resources, and which is in charge of the NMGP project.
The North African country is also building networks to distribute gas to industry hubs where automobile and aeronautics industries are expanding. Reportedly, the industrial sector in Morocco is growing fast and gas will be an important part of this growth.
Extension of gas transit agreement for supplies of Algerian gas in GME pipeline
In other related news, Naturgy Energy Group S.A a Spanish multinational natural gas and electrical energy utilities company that was formerly known as Gas Natural Fenosa on November 10 announced that it was in talks with Morocco and Algeria to potentially achieve an extension of the gas transit agreement for supplies of Algerian gas in the Gaz-Maghreb-Europe (GME) pipeline via Morocco to Spain.
Reportedly, gas deliveries through the GME pipeline fell to zero on November 1st after the long-term transit deal between Algeria and Morocco was not renewed ahead of its expiry on October 31st.
There are alleged reports that Morocco, which has estimated its resources at some 300 Tcf of conventional and unconventional gas in place, could replace lost gas from Algeria to Spain through the Morocco-Nigeria Gas Pipeline.
The Islamic Development Bank (IsDB) agreed to fund 50% of the Front-End Engineering Design (FEED) Study for the Nigeria-Morocco Gas Pipeline project. The multilateral development finance institution focused on Islamic finance will support the Moroccan contribution and participate in the financing of the project with US$ 15.4M under the “Service Ijara” operation.
For Nigeria, the IsDB will contribute US$ 29.7M to the FEED study which aims at preparing the required studies for the gas pipeline and help take the final investment decision by 2023 for the infrastructure project.
The IsDB funding will help carry out the environment & social impact study in order to ensure the project’s compliance with all local and international environmental and social regulations and standards. It will also finance land acquisition studies for agreeing with all countries to be crossed by the pipeline to ensure smooth implementation of the works at a later stage.