Nigerian President, Bola Tinubu, was recently in Malabo,  Equatorial Guinea, on a three-day official visit. During the visit,  he signed  an agreement with Guinean  President Teodoro Obiang Nguema Mbasogo on Gulf of Guinea gas Pipeline Project.

Areas covered in the  agreement include legislative and regulatory measures for the gas pipeline, establishment and operation, transit of natural gas, ownership of the gas pipeline, and general principles.

Speaking at the event, Tinubu said the signing of the agreement would open up new opportunities for gas exploration and employment.

The agreement with Equatorial Guinea comes just after about five months that the Nigerian National Petroleum Company (NNPC) Limited announced that  the Final Investment Decision (FID) on the Nigeria-Morocco Gas Pipeline (NMGP) Project would be taken in December this year.

NMGP is a $25bn gas pipeline project that  will pass through 13 African countries and all the way to Europe.

“We understand the arguments towards attaining energy transition, but the cheapest way to achieve that is through gas. We see clear opportunities that gas creates. Today we are building a number of trunklines and other gas infrastructure that will supply gas to a number of gas networks,” said NNPC’s Group CEO, Mele Kyari at the 2024 CERAWeek Conference in Houston, United States.

In June 2023, four Memoranda of Understanding were signed  in Abuja between Nigeria and five African countries, as part of NMGP project. These  MoUs were signed on behalf of Nigeria by  NNPC. The countries include  Morocco, Cote d’Ivoire,  Liberia, Benin and the  Republic of Guinea.

These MoUs, similar to those signed with ECOWAS on September 15, 2022, Mauritania and Senegal on October 15, 2022, and The Gambia, Guinea-Bissau, Sierra Leone, and Ghana on December 5, 2022, reaffirmed the commitment of the parties to the strategic project. Upon completion,  the project is expected to enhance the monetization of the natural gas resources of the affected African countries and also offer a new alternative export route to Europe.

The infrastructure project is also expected to  contribute to accelerating access to energy for all, improving the living conditions of the populations, integrating the economies of the sub-region, and mitigating desertification. These goals, it would achieve,  through the provision of sustainable and reliable gas supply that aligns with the continent’s new environmental commitments, while providing Africa with a new economic, political, and strategic dimension.

Speaking at the signing ceremony, NNPC’s boss Kyari said that “as a commercial enterprise, NNPC Ltd. sees this project as an opportunity to monetise Nigeria’s abundant hydrocarbon resources, by expanding Access to energy to support economic growth, industrialization, and job creation across the African continent and beyond.”

As a result of the ongoing invasion of Ukraine by Russia, European countries have cut down gas import from Russia. Before now,  Russia was the dominant natural gas supplier to Europe, with an average of about 62 percent of overall gas imports to the continent over the past decade, according to Rystad Energy. With Europe looking for an alternative gas supply, Africa stands to benefit.

Nigeria sees opportunities in expanding access to energy to support economic growth, industrialization, and job creation across the African continent and beyond. This is why the country has been keenly focused on the development  of NMGP and the Trans Saharan Gas Pipeline (TSGP).

The project would connect Nigeria’s Warri hydrocarbon fields to Algeria’s Hassi R’Mel feeder hub on the Mediterranean coast. Upon completion,  about  a trillion cubic feet of natural gas is expected to pass through 2,565 miles of pipeline yearly, with Algeria’s segment comprising 1,435 miles, more than half the total project length. TSGP will coast $13 billion. Out of this figure,  $10 billion is for equipment and construction, while  $3 billion is  for gas gathering centers.

“African nations that have historically been gas suppliers to Europe are well placed to scale up their exports. Africa’s advantage is that it already has existing pipelines connected with the wider European gas grid. Current pipeline exports from Africa to Europe run through Algeria into Spain and from Libya into Italy. Talks of long-distance pipelines connecting gas fields in Southern Nigeria to Algeria via the onshore Trans Saharan Gas Pipeline (TSGP) and the offshore Nigeria Morocco Gas Pipeline (NMGP) have picked up in recent months.

While the TSGP aims to utilize existing pipelines from Algeria to tap into European markets, NMGP aims to extend the existing West Africa Gas Pipeline (WAGP) all the way to Europe via West African coastal nations and Morocco. Further afield, African LNG exports have predominantly come from Nigeria and Algeria, with smaller volumes from Egypt, Angola, and a fraction from Equatorial Guinea. In addition, large-scale discoveries offshore in Mozambique, Tanzania, Senegal, Mauritania, and South Africa have the potential to yield additional natural gas exports once developed,” said Rystad Energy  in a statement.

“Europe is now considering how gas-rich African nations can be helped to scale up production and exports in the years to come. The European Union’s decision earlier this year that all natural gas investments are equivalent to investments in “green” energy signal that African gas is considered sustainable. The supply crisis driven by security interests may push Europe to fund projects that will also help with energy affordability back home. For instance, Europe could be a key financer of the proposed $13-billion TSGP project.”

Aside potential major exports to Europe,  gas  demand for domestic use in Africa is expected to rise, as countries on the continent commit to carbon neutrality. This demand will  be driven by industrialisation, population and expansion in economic activities. By 2050, about half of global population growth is expected to occur in Africa. Specifically, the population of sub-Saharan Africa is projected to double by 2050, according to the United Nations (UN).

At this year’s CERAWeek,  Nigeria reiterated its commitment towards utilising the nation’s abundant gas resources to trigger its industrialisation and economic development.

Nigeria is a predominantly gas-rich country with about  209tcf of proven gas reserves that can be leveraged for the country’s industrialisation and economic development. The state-owned oil firm, NNPC, plans to deepen gas utilisation domestically for industrialization and ensures that the entire country feels and optimises the use of the resource.

“Our focus is how do we move from a predominantly oil player to a gas player and, not just for gas for the sake of gas but gas for power generation, and for industrialisation, ” NNPC’s Executive Vice President, Upstream, Oritsemeyiwa Eyesan, stated at the conference.

“We want to capture all gas flared, utilise it and for domestic use and ultimately increase our energy transition footprint.”

According to her, “NNPC Ltd. is keying into the government agenda of using gas as a transition fuel, and for us, we want to ensure not only the domestic gas market but we also expand that to the region and internationally.”

Experts believe that the NMGP, TSGP pipeline projects and now the agreement with Equatorial Guinea, will not only spur industrialization in Nigeria, they will also reposition the country as a key energy player in the world..