- Nigerian President Muhammadu Buhari and Algerian President Abdelmadjid Tebboune have relaunched the Trans-Saharan pipeline that will connect their countries’ gas supplies.
- Nigeria relies on the project to secure profits while Algeria seeks regional partners and to become a major energy partner to Europe.
- The European Union is very interested in diversifying its gas supply over Russia’s invasion of Ukraine, thus closely following the project.
Why is Muhammadu Buhari seeking the camaraderie of Abdelmadjid Tebboune?
Answer: Nigerian President Muhammadu Buhari and Algerian President Abdelmadjid Tebboune have restarted the pipeline project to increase their energy exports.
On February 16, during the ECOWAS Mining and Petroleum Forum the energy ministers of Nigeria, Algeria and Niger signed the ‘Declaration of Niamey’, reviving the Trans-Saharan gas pipeline (NIGAL) project. This pipeline, which preparation plans began in 2002, aims to connect Nigerian gas reserves with Algeria, also connecting Nigeria to the European market. However, since its initial announcement, multiple setbacks halted the development of the project.
Nigerian President Muhamadu Buhari sees pipeline projects as a promising strategy for his country to expand its energy capabilities and diversify the supply. In the past, he has addressed other projects such as the Trans-Nigeria Gas Pipeline, as very ‘dear’ to him. The Trans Nigeria Gas Pipeline for example aims to create a steady gas supply network between the different parts of the country that will in turn be able to connect with the projected NIGAL.
The current fuel crisis in Nigeria, which has provoked petroleum shortages and electric cuts for a prolonged period of time, requires projects such as these to guarantee alternatives in energy production and distribution, apart from the benefits provided by the aperture of the European market.
What does Algerian president Tebboune want?
Answer: Tebboune is looking for regional partners to increase support against its neighbour, Morocco.
Algerian president Abdelmadjid Tebboune seeks support as hostilities with Morocco keep increasing. The neighbouring countries’ relations have only worsened in the last year, culminating in their break-up of relations last November. Among the many reasons, both countries compete for the leadership in Northern Africa over economic, social and diplomatic matters. Moreover, Morocco is leaning towards the US and EU in the look of partnerships, while Tebboune seeks Russian support. Furthermore, Algeria, the leading gas producer in Africa, could profit from partnerships with countries like Niger and Nigeria by bringing them access to the European gas market while encouraging diplomatic support and coordination in international affairs.
An example of this is the announcement of a G4 coalition within the African Union between Algeria, Nigeria, South Africa and Ethiopia. Announced just two days after the Declaration of Niamey, this (for now informal) group aims to strengthen the continent by reinforcing communication. Moroccan media is referring to the G4 as a “hard anti-Moroccan core within the African Union” since the group shares common beliefs against the regime of King Mohammed. The most relevant divergences are the opposition to Israel’s status as an observer in the African Union, and the recognition of the Sahrawi Arab Democratic Republic, the territory of Western Sahara contested by Morocco.
What is Tebboune doing?
Answer: Abdelmadjid Tebboune is increasing Algeria’s investments in the oil and gas industry.
Despite the potential to become a main European gas partner, Algeria’s national gas industry is experiencing a fall in its production. Trends show a decline (or at best, stagnation) in the production of natural gas while the internal demand is rising. There is, however, the potential for the expansion of its industry, from its reserves to its infrastructures. Relying heavily on the energy sector (90% of its export earnings), Tebboune seeks to both revitalise production and increase investment in non-energetic industries.
Also, while gas domestic usage has increased, exports to Europe have gradually increased in the last decade (accounting now for 83% of their clients). To tackle this, in the last years the Algerian governments of Abdelaziz Bouteflika and now Tebboune are encouraging plans to develop a renewable energy sector that can supply internal demand. If foreign demand keeps accelerating, Algeria will have to rely on both the improvement of its current energy industry and the development of a renewable, alternative sector to meet everyone’s interests. Still, plans like NIGAL would allow for the collection of transit fees from gas flowing from Nigeria to Europe.
What does Nigerian president Buhari want?
Answer: Muhammadu Buhari wants to diversify Nigeria’s dependency on the oil economy.
Nigerian President Muhammadu Buhari aspires to turn his state into a regional power in the next decades. By encouraging regional cooperation in the matters of energy, Muhammadu Buhari aims to boost the economic and social development of the nation, which remains challenged by high unemployment rates, poverty, and growing inequality. In the past, the successive mismanagement of military and civil governments have misguided the development of the nation.
The Nigerian economy is restricting the country’s development, and the abundant oil reserves have become Nigeria’s resource curse. Despite the apparent affluence, Nigerians struggle to obtain enough supply of oil, and prices are on the rise while the average wealth of the citizens keeps declining. Moreover, the infrastructure of the country has failed in the past to meet export quotas and international standards of production. In short, while Nigerian oil is abundant, Nigerian leaders’ ability to capitalise on it is scarce.
What is Buhari doing?
Answer: President Buhari is developing Nigeria’s energy industry and looking for partnerships beyond Algeria
Muhammadu Buhari is undertaking plans to reinforce Nigeria’s energy sector. He is counting on private and foreign investment to support the strategies. With access to Nigeria’s gas supply, European countries could diversify their energy imports, consequently financing the development of the energy sector. With one year left in office to influence his legacy, Buhari has accelerated his strategies to reinforce this industry. Next, Nigeria’s new Dangote refinery will free the country from the importation of refined petroleum oil products, allowing its national product to be positioned better in international and national markets.
Moreover, aside from conforming to Tebounne’s kinship, Buhari has also launched a parallel pipeline project with Algeria’s nemesis, Morocco. While being in the early stages of the deal (they agreed on the financing in December 2021), this ambitious plan would connect both countries through 13 other West African countries like Togo, Benin and Mauritania. It would also, beyond allowing the incumbent countries to obtain Nigerian gas, serve as an alternative route toward the European market through Spain. Buhari is not limiting himself to one partner, and even if Algeria’s Abdelmadjid Tebboune may not like Nigeria’s partnership with his neighbour, it offers the West African giant alternatives in case of future disruption to the project.
Who is winning and what about you?
Answer: The countries will economically benefit from the export of their natural gas, as well as the EU which is currently searching for partners.
The direct winners of this project are the countries involved in it. The abundance of gas reserves in Niger, Nigeria and Algeria will be able to flow towards both North and South to supply new clients. Even though there are no plans for future pipelines connecting with Southern Africa, the maritime transportation of NLG is not off the table, since Nigeria and Algeria are already developing their infrastructure in that direction.
For you (if you are European), this is good news. The diversification of the energy supply could stabilise long term energy prices. The current energy crisis in Europe has made the leaders of the European Union very interested in the project. European countries still depend on Russian gas. The Russian invasion of Ukraine has threatened the provision of Russian gas and even though, so far, there has not been an interruption of the supply, European leaders hope to diversify their imports. Since the EU aspires to become less energy dependent on a single partner and is working on its European Green Deal to become climate neutral, the opportunities offered by African gas (beyond Algerian) are a strategically important alternative.