NextFin News - Morocco’s state-controlled hydrocarbons agency is preparing to launch its first major capital raise for the $25 billion Nigeria-Morocco gas pipeline, a project that seeks to redraw the energy map of the Atlantic coast. Amina Benkhadra, head of the National Office of Hydrocarbons and Mines (ONHYM), confirmed on Wednesday that an intergovernmental agreement (IGA) will be signed this year to establish the legal and financial framework for the 6,900-kilometer conduit. The move marks the transition from a decade of diplomatic maneuvering to the hard reality of project financing for what is slated to be the world’s longest offshore pipeline.
The African Atlantic Gas Pipeline (AAGP) is designed with a maximum capacity of 30 billion cubic meters (bcm) per year. According to Benkhadra, approximately 15 bcm of that capacity is earmarked for Morocco’s domestic consumption and export to European markets, which remain hungry for non-Russian gas alternatives. The project is structured as a hybrid offshore-onshore route, traversing 13 countries along the West African coast. While the scale is unprecedented for the region, the immediate focus is on securing the initial tranches of equity and debt required to break ground on segments connecting Morocco to gas fields in Mauritania and Senegal.
Benkhadra, who has led ONHYM since 2003 and served as Morocco’s Minister of Energy, has long been the primary architect of the kingdom’s strategy to become a regional energy hub. Her stance is consistently bullish on the project’s feasibility, viewing it as a "strategic necessity" for African integration. However, her projections—including a target for first gas delivery by 2031—are viewed by some infrastructure analysts as highly optimistic. The project currently relies heavily on the political will of Rabat and Abuja, and while it has secured preliminary backing from the Islamic Development Bank and OPEC Fund, the $25 billion price tag remains a formidable hurdle for a consortium of developing economies.
The financial undertaking comes at a time of relative stability in global gas markets, though prices remain sensitive to geopolitical shifts. On Wednesday, Henry Hub natural gas futures for May 2026 were trading at $2.524 per million British thermal units. While these prices are far below the volatility seen in previous years, the long-term viability of the pipeline depends on sustained European demand and the ability of West African producers to compete with liquefied natural gas (LNG) from the United States and Qatar. Critics of the project point out that by the time the pipeline is fully operational in the 2030s, Europe’s transition toward renewable energy may have significantly eroded the market for piped fossil fuels.
Beyond the financial and environmental questions, the pipeline faces complex transit risks. Passing through 13 different jurisdictions requires a level of regulatory and security coordination that has rarely been achieved in the region. Each segment of the 6,900-km route introduces new layers of sovereign risk and potential for delays. To mitigate this, the upcoming IGA aims to create a joint venture entity that will manage the project’s commercial operations, effectively insulating the technical management from the shifting political winds of individual member states.
The success of the initial fundraising round will serve as a litmus test for international investor appetite in large-scale African fossil fuel infrastructure. If Morocco and Nigeria can convince global capital markets that the AAGP is a viable bridge to Europe rather than a stranded asset in the making, it will provide a blueprint for other cross-border projects on the continent. For now, the focus remains on the ink yet to be dried on the intergovernmental agreement, which will determine the exact share of the $25 billion burden each partner must carry.
Explore more exclusive insights at nextfin.ai.
