American energy expert Jeffrey Porter has expressed skepticism about the feasibility of Morocco's proposed African-Atlantic gas pipeline project. The project aims to connect Nigeria to the Atlantic coast via Morocco. Porter stated that the economic model behind the project does not guarantee a return on investment. He highlighted that the pipeline's passage through 11 countries poses significant challenges. These challenges include the complexity of securing payment for transit fees in kind.
The proposed pipeline's economic viability is further complicated by the requirement for 11 countries to receive 5% of their gas transit fees in kind. This arrangement could undermine the project's financial sustainability. Porter emphasized that countries produce gas for sale, and pipeline projects rely on customers paying for infrastructure usage to recover investment costs. The African-Atlantic pipeline's economic model, according to Porter, fails to meet these essential conditions.
In contrast, the Trans-Saharan Gas Pipeline (TSGP) project between Nigeria, Niger, and Algeria has progressed to the implementation stage. The TSGP, which spans approximately 4,000 kilometers, began construction in Algeria's Oulf region in June. Topographic surveys are set to commence in Niger this October. The TSGP is expected to have a capacity of 20-30 billion cubic meters of gas per year.
The TSGP is not only a gas pipeline but also a project aimed at promoting energy and economic integration in Africa. It seeks to provide a new outlet for Nigeria's gas resources and enhance Niger's role as a transit country. The project also aims to solidify Algeria's position as a major energy hub linking African resources to international markets, particularly in Europe.
International and regional organizations recognize the significance of the TSGP as a strategic project. It is expected to boost Africa's standing as a key player in the global energy market and support regional economic integration and cooperation. The project's impact on energy security and economic development in the region is anticipated to be substantial.
Algeria's President Abdelmadjid Tebboune has expressed concerns about the economic viability of the African-Atlantic pipeline. He noted that the project's economic equation does not appear logical given the volume of gas allocated for in-kind payment compared to the expected returns. This skepticism aligns with Porter's assessment of the project's feasibility.
The Algerian government remains committed to regional energy projects, as evidenced by the TSGP. The project's progression reflects Algeria's strategy to become a major player in the African energy sector. The country's efforts to promote regional cooperation and economic integration through energy projects are ongoing.
Key points
- The African-Atlantic gas pipeline project's feasibility is questioned by US expert Jeffrey Porter due to its complex economic model and transit fee arrangements.
