In a recent analysis, Geoff D. Porter, a prominent American expert on oil and gas issues in North Africa, has cast significant doubt on the economic viability of Morocco's proposed Atlantic Africa Gas Pipeline project. This ambitious initiative aims to connect Nigeria's gas resources to the Atlantic coast of Morocco. However, Porter argues that the project's framework does not ensure profitability or a return on investment, stating emphatically that it "will never be realized."
In a post shared on the social media platform X, Porter elaborated on the challenges posed by the number of countries involved in the pipeline's route, which spans eleven nations. He pointed out that the economic implications of each transit country taking a 5% fee from the gas transported fundamentally jeopardize the project's feasibility. The multitude of agreements regarding transit fees complicates the potential for any return on investment, pushing it beyond the horizon of feasibility for investors.
Porter explained that gas-producing nations rely on selling their gas, and gas pipeline projects need customers who are willing to pay fees for using the infrastructure to recoup their investments. He emphasized that the Atlantic Africa Gas Pipeline does not meet the necessary economic conditions to achieve this objective. The project fails to address two critical points: enabling gas-producing countries to sell their gas to generate revenue and ensuring enough income to guarantee a return on investment.
Reflecting on comments made by Algerian President Abdelmadjid Tebboune during a recent press interview, Porter noted that the President's assessment of the economic equation associated with the gas pipeline "makes no sense," particularly when considering the volume of gas each country would extract compared to the anticipated revenues from the project.
In contrast, the Trans-Saharan Gas Pipeline (TSGP), which connects Nigeria, Niger, and Algeria over nearly 4,000 kilometers, has entered its implementation phase since June, with construction work on the Algerian section commencing in the same month. Topographic surveys for the Nigerian section are expected to begin this October. With a projected transport capacity of between 20 and 30 billion cubic meters of gas annually, the TSGP extends beyond merely transporting natural gas. It is viewed as a significant project for energy and economic integration in Africa, opening new access to Nigerian gas resources and strengthening Niger's role as a transit country while enhancing Algeria's position as an energy hub linking continental resources to international markets, particularly in Europe.
International and regional organizations agree on the importance of the TSGP, considering it a structural project capable of bolstering the continent's role as a central player in the global market balance and establishing a major energy corridor that serves energy security, regional economic integration, and continental cooperation.
As reported by aps.dz.
