After US Interest, UAE To Help Fund Nigeria-Morocco Pipeline

After growing interest from the US, the United Arab Emirates (UAE) has agreed to fund the $25 billion Morocco-Nigeria gas pipeline project.

Morocco’s Minister of Energy, Leila Benali, confirmed the UAE’s plans to provide funds for the gas pipeline. The Minister also stated that the project has gained strong financial backing from major international institutions. These organizations include the Islamic Development Bank, the OPEC Fund, and the European Investment Bank.

The gas pipeline, also called the “African-Atlantic Gas Pipeline,” will connect Nigeria’s gas network to Morocco and then travel north toward Europe.

The Nigeria-Morocco Gas Pipeline Project

Launched in 2016 during Morocco’s King Mohammed VI’s visit to Nigeria, the proposed Nigeria-Morocco pipeline aims to connect West Africa to Europe via Morocco.

The pipeline will extend over 5,600 kilometres, making it one of the longest gas pipelines in the world.

It will transport gas from Nigeria through 13 African countries to Morocco.

The pipeline will then extend from Morocco to Europe, offering a more secure and diversified route for natural gas supply to Europe.

The 13 concerned countries are Nigeria, Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, Mauritania, and Morocco.

The pipeline aims to transport up to 30 billion cubic meters of gas annually.

Read: US Shows Interest in Nigeria-Morocco Gas Pipeline Project

Benefits for Nigeria, the UAE, & Morocco

The Nigeria-Morocco pipeline will position Morocco as a key energy hub, improving ties with the UAE, the European Union, and African countries. On April 23, Morocco expressed interest in an LNG terminal. The terminal will connect to an existing pipeline that links Morocco to Spain and industrial zones in Mohammedia and Kenitra. Consequently, Morocco would become a gateway for African gas to Europe.

As for Nigeria, the pipeline will cement Nigeria’s role as a significant gas supplier, rivalling Algeria and Egypt. Nigeria’s ability to export gas to Europe would deepen its economic ties and strengthen its position as a critical energy partner for Europe.

For the UAE, funding the Nigeria-Morocco pipeline will enable it to expand its growing economic footprint in Africa. The UAE has been boosting investments in Africa (ports). Therefore, the UAE is strengthening its foothold in Africa by funding the pipeline project.

Economic & Geopolitical Impact of the Nigeria-Morocco Gas Pipeline

The Nigeria-Morocco pipeline will supply cheap natural gas to West African countries. These countries need affordable gas for electricity generation and feedstock for their gas-based industries.

• Reducing Energy Poverty: Over 100 million people in West Africa lack reliable electricity. The Nigeria-Morocco pipeline could help solve this crisis.
• Cheaper Energy for Industries: A stable gas supply will help lower production costs, boosting manufacturing in Nigeria, Ghana, and Morocco.

The pipeline will provide Europe access to a new source of natural gas from Africa. Europe has long relied on Russian gas supplies to meet its energy needs. Unfortunately, the Russia-Ukraine war disrupted Russia’s gas supplies. As a result, the war pushed Europe to seek additional gas sources. Thus, the Nigeria-Morocco pipeline project will help cushion Europe from potential future supply disruptions.

Challenges & Risks

The Nigeria-Morocco gas pipeline is forecast to cost $25+ billion, making it one of Africa’s most expensive energy projects. Most of the 13 countries the pipeline will cross can’t afford to fund it due to economic and financial constraints (debt, currency devaluations). Thus, funding must come from financial institutions such as the World Bank, the African Development Bank, or private investors.

The European Union is accelerating the use of renewables to meet its energy needs, which may reduce long-term gas demand. The EU is already a global leader in developing renewable energy technology. The share of renewables in the EU’s energy usage in 2023 was 24.5%. With the revised Renewable Energy Directive in November 2023, EU member states agreed on a general renewable energy target of at least 42.5% by 2030 to reach at least 45%.

Algeria, Morocco’s key rival in North Africa, will pose a geopolitical risk for the Nigeria-Morocco pipeline. Algeria, a major gas exporter, will view NMGP as a threat to its proposed Trans Sahara gas pipeline project. It exports gas via Medgaz pipelines to Spain, Italy, and France. Algeria also shut down the Maghreb-Europe Gas Pipeline (MEGP) in 2021 due to tensions with Morocco. Algeria’s concern is that the NMGP could divert EU gas demand away from Algeria. As such, Algeria may lobby against the NMGP in the European Union or even the African Union.