Nigeria And Morocco Wealth Funds Plan Natural Gas Pipeline To Europe

Nigeria And Morocco Wealth Funds Plan Natural Gas Pipeline To Europe

Nigeria has signed a deal with Morocco to construct Trans-African gas pipeline that will connect the continent’s largest oil producer to Europe’s lucrative gas market.

The 4,000 kilometer-long pipeline, to be funded by the Nigeria Sovereign Investment Authority and Ithmar Capital, a Moroccan sovereign wealth fund.

The two governments signed the joint partnership during a state visit by Morocco’s King Mohammed to his Nigerian counterpart, Muhammadu Buhari in Abuja, last week.

The pipeline will extend the current pipeline operated by West African Gas Pipeline Company in Africa’s most populous nation that transports natural gas from Nigeria to Togo, Benin and Ghana.

“In this agreement, both countries agreed to study and take concrete steps toward the promotion of a regional gas pipeline project that will connect Nigeria’s gas resources, those of several West African countries and Morocco,” Ecofin Agency quoted Geoffrey Onyema, Nigeria’s minister of Foreign Affairs.

The governments did not however disclose when the construction will start and it is unclear exactly the route the pipeline would take, though the developers foresee it following the coast.

The agreement comes 14 years after a similar initiative between Nigeria and Algeria fell through in 2002, due to lack of financial support, Moroccan Press Agency reported.

Nigeria is rich in natural gas but is in the middle of chronic electricity shortages that are straining industries and weakening an already struggling economy, which slumped into recession in August.

The West African nation has the biggest gas reserves of more than 180 trillion cubic feet, a vast potential that represents a major solution to the nation’s power shortages, Bloomberg reported.

Nigeria currently relies on gas plants for about 80 percent of its energy.

The government attributed the drop in electricity generation to vandalism of the pipelines that supply gas to the power plants.

The Niger Delta Avengers militant group in the oil-rich Niger Delta blew up export pipelines in the region in February and May.

The two nations also agreed to jointly develop their manufacturing and agro-business sectors, to improve their export capacities and attract foreign capital, Liberty TV reported.