NARCO: Moroccan-Nigerian Gas Pipeline, A White Elephant

A specialised American study published by the North Africa Risk Consulting Centre (NARCO) described the Moroccan-Nigerian gas pipeline project as a “white elephant,” a term implying that the project is prohibitively expensive and impractical, with a minimal impact on energy supplies.

The study detailed many of the fallacies the Moroccan regime attempted to promote in the media to oppose the Algerian-Nigerian gas pipeline, which has made significant progress and moved beyond the project stage to implementation. The study, reported by the Spanish news agency Europa Press on Sunday, stated that both Morocco and Nigeria are not only unprepared but also incapable of implementing the project.

North Africa Risk Consulting explained that exporting gas from any country presupposes that country has a ready infrastructure. However, millions of Moroccans lack readily available gas infrastructure. This means that Morocco itself is in dire need of gas to generate electricity for its population, as exporting any commodity or material is only possible if the demand is high.

In numerical terms, the study states that the Moroccan regime claims to supply approximately 168 million people with gas via the promised pipeline, while the actual figure drops to only 40 million, or just 10% of the number promoted by Moroccan officials and their media outlets. Furthermore, the 14 countries along the West African coast through which the pipeline is supposed to pass receive a share of the gas in the form of transit fees.

Upon closer examination, the study assumes that each country through which the pipeline passes receives at least 5% of the gas, as is the case for Tunisia concerning the gas pipeline linking Algeria to Italy, and 7% for the gas pipeline that used to connect Algeria to Spain via Morocco. It concludes that the remaining gas reaching Morocco in this scenario does not exceed 15 billion cubic meters. Adding to this is the Moroccan government’s need for electricity generation and other necessities, meaning that the remaining quantities remain limited.

The study indicates that Morocco is expected to need three billion cubic meters of gas by 2040 to meet its energy needs, leaving a surplus of 12 billion cubic meters. Meanwhile, Algeria exports approximately 44 billion cubic meters of gas annually via Italy and Spain, in addition to the quantities transported by the Algerian-Nigerian gas pipeline, which is far ahead of the planned Moroccan pipeline. This significantly increases the volume compared to what the Moroccan regime hopes for.

Another issue raised by the study that renders the Moroccan project unfeasible concerns the time required to recoup the investment. Comparing the Moroccan project to the West African Gas Pipeline, which transports five billion cubic meters of gas from Nigeria to Togo, Benin, and Ghana over a distance of 680 kilometres, the World Bank estimated the cost at approximately $900 million – a 52% increase over the initial budget.

Given that the Moroccan pipeline’s projected budget is estimated at around $25 billion, the final price could reach approximately $38 billion, making it one of the most expensive gas pipelines in the world, according to the American consulting firm. NARCO indicated that the cost recovery period would be lengthy and difficult for financiers to accept. It cited the example of the Medgaz pipeline, which connects Algeria and Spain and transports 10 billion cubic meters of gas annually. Its cost was estimated at $1.4 billion, and despite its completion in 2009, it did not begin generating profits until 2021. This led the study to estimate the payback period at approximately 288 years.

The study questioned the Moroccan regime’s insistence on clinging to the project despite its awareness of its impossibility and futility. According to geopolitical analyst and energy expert Jeff Porter, “The Moroccan royal palace prefers illusory projects that help present the monarchy as an institution that thinks and produces innovation.”

The American study says that the promoters of this project, such as the director of the Moroccan Office of Hydrocarbons and Mines, Amina Benkhadra, and the Minister of Environmental Transition, Leila Benali, realise it is crazy, but they have no choice but to promote it. The expert confirmed in a statement to the Europa Press Agency that the Moroccan bet has nothing to do with the gas pipeline, but rather with trying to create facts on the ground that make the alleged Moroccan claims of sovereignty over Western Sahara irreversible.