The Moroccan-Nigeria Gas pipeline: Saving Rabat and helping Europe's energy artery

On August 24, 2021, Algeria officially announced the severing of diplomatic relations with Morocco, following weeks of escalating tensions over various differences, some of them over historical border issues, others related to the latest political developments in the region, the most important of which, of course, is the agreement signed between Morocco and Israel to normalize relations. Algeria considers this to be a direct threat to the country.

This diplomatic initiative will certainly have an impact on many areas of cooperation between the two countries, especially in the field of energy, where the new initiative of severing ties has led to the termination of the Maghreb-Europe gas pipeline project, which connects Algeria to Europe through the Kingdom of Morocco, through which Morocco secured 97 percent of its internal gas needs. This guarantees Algeria a financial return and guarantees Spain and Portugal a significant share of its energy needs.

The impact of diplomacy on energy

Since its opening, the Maghreb-Europe gas pipeline has become one of the main energy resources of the region, the project from Algeria, through Morocco to the Iberian Peninsula, to Spain's gas volume meets 50% of the region's energy needs, which means that the gas pipeline is one of the lifeblood of the southern European countries, however, As a result of the diplomatic crisis affecting Morocco's relations with Algeria, Algerian President Abdel Majid Teben ordered that the contract linking Algeria's national oil and gas company Sonatrach with Morocco's Office of Electricity and Drinking Water not be renewed, the expiry date of which coincided with the beginning of the crisis between the two neighboring countries. Algeria has promised that the decision will not affect its energy commitments to Europe, which depend on the opening of the "Medgaz" gas pipeline in March 2011, which, although it has an annual flow of 8 billion cubic meters, is 2 billion cubic meters less than the Maghreb-Europe gas pipeline, but which is awaiting the completion of expansion works. Until its annual flow reaches 10.5 billion cubic meters.

On the other hand, according to information disclosed by the Moroccan Office of Electricity and Drinking Water, Morocco is not concerned about this decision by Algeria, although Morocco provides 97 percent of its gas needs through the stalled project, the suspended project provides 97 percent of its gas needs, half of which is in return for granting rights through its land. Rabat buys the other half at a discounted price.

In view of these facts, Rabat began to look for new sources of energy, looking for a set of short -, medium - and long-term solutions to realize that the gas of its eastern neighbors would be sufficient. As for the emergency solutions, which are nothing more than importing fossil fuels (such as coal) or importing electricity directly from Europe, for the medium and long term solutions, first try to find natural gas resources in the soil of Morocco, or try to import liquefied gas from any country in the world (such as Nigeria, the United States, Russia and Qatar) that can be transported by ship. For the process to succeed, Morocco would have to build storage stations for this type of liquefied gas, which are not yet available as Moroccan officials plan to equip them in early 2028, before politics comes into play and bonds are dispersed, and it is understood that the cost of supplying liquefied gas is still high compared to importing gas by pipeline.

However, despite the daunting task, Morocco signed a "surprise" deal with its northern neighbor Spain in early 2022, through which it benefits from gas via the Maghreb-Europe pipeline, which has stopped working, but this time the gas is going in the opposite direction and will be shipped from Europe to Africa.

The agreement, announced by Madrid on February 3, confirms the return of Morocco-Spanish relations to a previous era after serious tensions over the past year, as the Spanish Environment Minister Teresa Rivera said that the Kingdom of Morocco had requested assistance from Spain to ensure its energy security and confirmed that her country had agreed to the request. Since it would take the same step with any neighboring country or any strategic partner, speaking on the issue of gas sources, the Spanish minister added, "Morocco will buy the LNG from the global market before it reaches Spain, where we will work to restore the LNG to its normal state and then send it to Morocco via the Maghreb-Europe pipeline." The figures are enough without having to elaborate on the timing or the amount Rabat will get from the process, on the other hand, the Moroccan side did not provide any details on the deal, while some sources confirmed that negotiations between Rabat and Madrid will take weeks to reach a final version of the deal.

The deal will meet Morocco's energy needs, even temporarily, while waiting for more sustainable, lower-cost solutions, which Rabat is working towards to ensure its energy security, and the most important of these solutions will undoubtedly be the discovery of gas fields on Moroccan territory.

In October 2019, African Youth magazine published a story in which it talked about Morocco's energy exploration activities at the beginning of the new millennium in search of new resources, at the time, Moroccan media celebrated the discovery, which was expected to pump out 100 billion barrels of oil, and then, the wait ended with the painful fact that the oil reserves did not exceed 1 billion barrels. It's impossible to use.

African Youth magazine, which focuses on African affairs, added that Morocco learned a lot from this lesson and began to treat the finds with great caution, with a recoverable gas volume of up to 2 trillion cubic meters, and Rabat has maintained its caution despite the importance of the find. Not least because the area had previously been inspected by the Spanish state oil company "Repsol", which said the process of extracting the amount of the previous discovery (less than the amount later found by the British company) was unprofitable.

In January, the National Office of Hydrocarbons and Minerals announced a gas discovery in the "Lixos" offshore area near the city of Larash, while ongoing studies in the area have yet to determine the amount of gas available, Amina Bin Hadera, director of the National Office of Hydrocarbons and Minerals, said in a press statement that drilling operations began in December. The depth reached 2,512 meters at the end of the month, confirming the presence of gas in the 'Anchoa 2' well, adding that if things go as Rabat hopes, the gas production process will start in 2024.

Three days after the initial announcement, a British company spoke of the existence of a "promising discovery" of gas in Morocco's northeastern "Greshif" region, adding that additional tests were being carried out to confirm the amount found. However, despite the good news from the exploration area, Rabat is looking for sustainable solutions that can meet its energy needs, as the amount of these gas found on Moroccan territory can only meet the country's limited regional needs at best.

In December 2016, King Mohammed VI met with President Muhammadu Buhari during his visit to the Nigerian capital Abuja and the two sides agreed to launch a feasibility study in May 2017 to connect the two countries via a gas pipeline from Nigeria to Europe via Rabat, two years after the visit. In June 2018, the two countries signed a joint declaration aimed at laying the groundwork for finalizing the mammoth project, which will stretch over 5,660 kilometers and pass through 10 African countries in addition to the two signatories, Moroccan Foreign Minister Nasser Bourita said in a statement. The agreement will make this new pipeline one of the important energy solutions for the West African region, which includes areas without electricity, in addition to creating jobs for West African countries due to this huge project with an investment value of about $30 billion, it will also help food production because this energy can be used to produce fertilizer, which means direct impact on agricultural production. To address the food challenges facing many parts of Africa.

Francis Perrin, president of the Institute of International and Strategic Relations, said the economic and environmental importance of the project is that Nigeria offers sales opportunities for the natural gas it produces during oil production, explaining, "When you produce oil, you are forced to produce this gas, The absence of any market for this gas means that it needs to be burned, which, in addition to the environmental impact, has a huge economic cost." For Morocco, the gains will be doubled, first, Morocco will be able to secure its energy needs, and then it will certainly benefit from this economic partnership, redefining the relationship with Nigeria, which has not always been on Morocco's side on major issues, especially the Sahara, which will give Rabat a much broader presence in the West African region. This is in line with the recent new direction of the Kingdom of Morocco's focus on the African dimension in its foreign relations.

Nigeria's ambitions for energy and economic partnerships with North African countries will not stop there, but will cross the Moroccan border and move a little further east before landing in Algeria, which is also working with Abuja on the Trans-Saharan gas pipeline project Negal.

The first signs of the project began in 2002 with the signing of a memorandum of understanding between Algeria and Nigeria, but the start of the project, which cost about $20 billion, was delayed not because of a lack of funding for the project, but because of difficulties in finding a market capable of absorbing 30 billion cubic meters of Nigerian gas. The difficulty of finding a market to sell this gas has increased after a number of strong competitors, led by the United States, entered the market, thanks to shale gas conversion technology, and not forgetting Russia, which supplies gas to Europe at competitive prices, although recent changes in the gas market are not conducive to this project, which is mainly aimed at exporting energy to foreign markets. The two countries confirmed efforts to implement the project as soon as possible, and in September last year, the Director General of Sonatrach confirmed that the technical studies for the project had been completed, noting, "However, economic viability remains related to demand, supply and price." A few days later, Nigeria's Energy Minister, Tamiri Selfa, stressed that the country had begun construction of a gas pipeline to Europe through Algeria.

The importance of this project for Nigeria is that it only pays for transport to Niger and Algeria, on the other hand, Algeria's self-sufficiency in gas will increase the country's exports, don't forget, Algeria has a pipeline network to Europe, which means lower costs and shorter completion times for this transmission line, and has gas liquefaction stations. To export to distant markets in far Asia.

For Nigeria, this project will not be a competitor to its project with Morocco, but Abuja sees the two projects as an integration in the interests of its gas export projects, as confirmed by Tamiri Selfa on the sidelines of a recent Gastec conference in Dubai, UAE. Commenting on the exclusion of one of the two projects in favor of the other, he said, "We can complete both projects at the same time, and the gas that will pass through Morocco will be transported to Europe, while we will direct the gas that reaches Algeria to African countries." Observers explain that Nigeria hopes to benefit from the late golden age of this energy source, where renewables are starting to emerge while other types of energy exist.

Europe always benefits

Europe is closely watching the development of gas projects in Africa as the old continent has for years sought to diversify its energy sources away from relying on Russia, which is currently gearing up for war with Europe due to the recent Ukraine crisis. Earlier, Europe started dealing with Azerbaijan and established partnerships with the United States and Qatar, and then it wanted to add African suppliers to its list of gas suppliers.

On the other hand, Russia, which fears giving up its natural resources and doesn't much like its competitors increasing the European market, is watching all these developments to protect its economic interests, but with the beginning of confrontation in the Ukrainian arena, this cold energy war may be over, with Europe and the United States starting to play the economic sanctions card. Hours after Germany announced it was suspending the Nord Stream 2 gas pipeline linking Germany and Russia via Hungary, Ukrainian President Volodymyr Zelensky called on Europe to cut off the vital energy artery that allows Moscow to export its surplus gas.

If the situation develops and Europe boycotts Russia's natural resources, these political issues will undoubtedly benefit the African project. It is true that the volume of African exports, led by Nigeria, does not meet all of Europe's energy needs, after which, until recently, it has not found open markets for its exports, meaning that there are more opportunities for the region to benefit from energy revenues, which undoubtedly helps the attempt to develop West Africa.