In a recent commentary, American oil and gas expert Jeffrey Porter highlighted significant concerns regarding Morocco's proposed African Atlantic Gas Pipeline project, which aims to connect Nigeria to the Atlantic coast, ultimately reaching Morocco. According to Porter, the economic model presented by Morocco does not guarantee profitability or the recovery of the investments that would be injected into the project, leading him to assert that "this project will never be realized."
On his platform, Porter elaborated that the pipeline's route, which crosses eleven countries, poses a major challenge to its feasibility. A critical issue arises from these nations only receiving five percent of their rightful transit fees in the form of gas, fundamentally undermining the project's viability from the outset. He emphasized that a multitude of agreements regarding the payment of transit rights could significantly affect the investment recovery period and the expected returns.
Porter further noted that countries produce gas primarily for sale, which necessitates that pipeline projects secure customers willing to pay for the use of infrastructure, thereby allowing for the recovery of investment costs. He underscored that the African Atlantic Gas Pipeline lacks the necessary economic conditions to achieve this goal.
In conclusion, Porter identified two essential criteria that the project fails to meet: firstly, it does not enable producing countries to sell their gas profitably, and secondly, it does not ensure that the pipeline will generate sufficient revenue to recoup investment costs. He referenced a recent statement by President Abdelmadjid Tebboune, who expressed skepticism regarding the economic rationale behind the African Atlantic Gas Pipeline, particularly when considering the volume of gas allocated for transit compared to the anticipated returns.
Conversely, Porter pointed to the Trans-Saharan Gas Pipeline (TSGP) project, which connects Nigeria, Niger, and Algeria, spanning approximately 4,000 kilometers. This project has moved into the implementation phase as of June, with construction underway in Algeria's Ouled region, and topographical surveys expected to commence in Nigeria this October. With a projected capacity of 20 to 30 billion cubic meters of gas annually, the TSGP is not merely about transporting natural gas; it is viewed as a strategic initiative for energy and economic integration across Africa. It aims to provide a new outlet for Nigerian gas resources, reinforce Niger's role as a transit country, and solidify Algeria's position as an energy hub linking the continent's resources to international markets, particularly in Europe.
International and regional organizations recognize the significance of the Trans-Saharan Gas Pipeline as a structural project that could enhance the continent's status as a key player in global market equilibrium, serving as a major energy corridor that supports energy security, regional economic integration, and continental cooperation.
As reported by aps.dz.
