April 12, 2024
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OIL & GAS

NNPC eyes $25bn gas deal, analysts weigh risks

The Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari, has said that an investment decision on the $25bn gas pipeline from Nigeria to Morocco that could supply the commodity to Europe will be taken next year.

Kyari’s revelations have received commendation from energy experts, but they described the move as a risk considering the push for energy transition being championed by Western nations, including those in Europe.

The NNPC and Morocco’s National Office of Hydrocarbons and Mines signed a memorandum of understanding last month that inched the long-gestating project closer to reality.

The conduit is one of two such initiatives the NNPC is promoting in an effort to capitalise on European demand for new sources of gas after Russia’s invasion of Ukraine.

”We will take a final investment decision next year,” Kyari told Bloomberg on Monday. He said discussions around financing were ongoing, without disclosing the institutions interested in backing the 5,600km pipeline that would deliver gas to 11 countries along the African coast on its way to Morocco, before connecting to Spain or Italy.

The 15-nation Economic Community of West African States is also a signatory to the MOU. The project will cost $20-25bn to build and will be constructed in phases, according to Kyari. He also expressed hope that the first segment would take three years to finish and the others, five years.

Commenting on the deal, an energy law expert, Prof. Ayoade Adedayo, told our correspondent that though the move was commendable, the push for energy transition by the Western world had made it risky.

He said, “The truth is that you can’t suddenly change the world economy overnight to the use of renewables. It just doesn’t work. In the medium term, I think there will be some role for natural gas in the energy mix.

“That is what this decision is all about, where Nigeria wants to invest in the pipeline that takes our gas to Morocco and from there it goes to Europe. Right now, due to the war in Ukraine, the gas that was coming to Western Europe from Russia has been cut off.”

Culled from The punch

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