By Joseph Murphy
The intergovernmental agreement for the $25b African Atlantic Gas Pipeline (AAGP) gives the long-planned project its strongest political foundation yet. But the 6,900km corridor must still secure gas, financing and credible buyers, while contending with a rival project across the Sahara and uncertainty over Europe’s long-term demand.
The AAGP would run for nearly 6,900km mostly offshore from Nigeria through Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, The Gambia, Senegal and Mauritania before reaching Morocco. Additional interconnections could also serve the landlocked states Burkina Faso, Mali and Niger. At its northern end, the pipeline would connect with the existing Maghreb-Europe system linking Morocco with Spain.
The pipeline’s planned capacity is 30bcm/yr, of which up to 15bcm could be delivered to Morocco and European markets, with the balance intended for consumers along the West African route. While the anchor supply would come from Nigeria, the project envisages receiving additional volumes from other producers along the route, notably Ghana, Cote d’Ivoire, Senegal and Mauritania.
A decade in development
The intergovernmental agreement was signed in Lungi on 19 July by the 12 members of the Economic Community of West African States (ECOWAS)—Benin, Cabo Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Nigeria, Senegal, Sierra Leone and Togo. It creates a legal framework for the project and demonstrates that all participating countries are committed and share a common vision for its development, Amina Benkhadra, director general of Morocco’s state-owned National Office of Hydrocarbons and Mines, explained to Petroleum Economist. Morocco and Mauritania are expected to add their signatures shortly after the summer recess, she said.
“When you have electricity, you have a pathway to industrialisation, and when you industrialise, you have a pathway to creating jobs and opportunities for our young people” Ayuk, African Energy Chamber
The agreement builds on a decade of discussions, with the project dating back to an initiative launched in 2016 by Morocco’s King Mohammed VI and then-Nigerian President Muhammadu Buhari in 2016. A formal cooperation agreement followed in 2017, while Nigeria, Morocco and ECOWAS signed a memorandum of understanding in September 2022. Further agreements were subsequently reached with the national oil companies and governments of participating transit countries.
ECOWAS ministers endorsed a draft intergovernmental agreement in 2024, and regional leaders approved the project’s institutional framework that December. Since then, the developers—Nigeria’s NNPC and Morocco’s ONHYM—have completed feasibility and FEED studies, while environmental and social studies and offshore reconnaissance surveys are “at a very advanced stage”, according to Benkhadra.
•Map showing route of the AAGP
The route of the proposed AAGP
Next steps
Next, the governance arrangements agreed by the participating states must be put into practice. This will involve establishing a project company in Casablanca and a Pipeline Higher Authority in Abuja, as well as aligning regulatory, tax and operating rules across the countries along the route, Benkhadra said.
“For investors, this common governance framework is fundamental,” she explained. It should reduce the political and regulatory risks associated with a project crossing multiple jurisdictions and give investors greater confidence that the rules will remain predictable over the long term.
Attention is also shifting to how the project will be financed. The intergovernmental agreement and technical studies have strengthened the project’s commercial prospects, creating a basis for discussions with strategic investors, development finance institutions, export credit agencies and commercial banks. “The financing strategy will combine sponsor equity, long-term debt and risk-mitigation instruments,” Benkhadra said, with the aim of allocating risks appropriately among the parties involved.
Morocco and Nigeria covered the $90m cost of the second FEED phase, supported by funding from outside financiers, including the Islamic Development Bank and the OPEC Fund. Morocco is seeking support from the World Bank and the US Eximbank, among others.
The pipeline will be developed as a series of independent regional sections rather than as a single project, Benkhadra continued. This should reduce execution risk, allow the most commercially advanced stretches to proceed first and enable financing to be raised progressively as new sources of supply and demand are added.
Initial work would prioritise a northern section connecting Senegalese and Mauritanian gas resources with Morocco, alongside a southern extension of the existing West African Gas Pipeline (WAGP) from Ghana into Cote d’Ivoire. Later phases would connect Nigeria more directly with Ghana and build the central section between Cote d’Ivoire and Senegal, ultimately joining the two systems. While there is no official guidance on when FIDs might be taken, construction is expected to start in 2028, with first gas targeted around 2031.
Rewards for Africa
AAGP is intended to do more than meet West Africa’s rapidly growing energy demand. By connecting gas-producing countries with neighbouring markets, it can provide reliable, competitively priced energy to economies with limited domestic resources or heavy dependence on costly imported fuels, according to Benkhadra.
Lack of energy access remains a significant hindrance to Africa’s economic and societal development. As of 2024, more than 180m people in West Africa lacked access to electricity, equivalent to close to 40% of the region’s population.
More secure gas supplies would support new gas-fired power capacity, improve electricity reliability and lower energy costs for businesses. The benefits could multiply across the wider economy by enabling investment and growth in energy-intensive industries such as mining, cement, steel, fertilisers and manufacturing, while creating jobs, strengthening local supply chains and improving regional competitiveness.
By linking several sources of supply with multiple markets through shared infrastructure, AAGP would also help create an integrated regional gas market. Aggregating demand should improve transportation economics, strengthen security of supply and provide a more resilient foundation for industrialisation across West Africa.
“When you have electricity, you have a pathway to industrialisation,” NJ Ayuk, chairman of the African Energy Chamber, told Petroleum Economist. “When you industrialise, you have a pathway to creating jobs and opportunities for our young people.” This will mean more young people remaining in West Africa and contributing to local economies rather than migrating to Europe, he said.
Uncertain European prospects
The other potential prize is gas exports to Europe, although there are substantial doubts over whether such sales would ever materialise. Benkhadra said that, since the start of the Russia-Ukraine conflict and the resulting energy crisis, European policymakers had become more amenable to supporting gas projects, citing Brussels’ decision to classify gas as well as nuclear as sustainable investments.
European gas demand is set to contract over the coming years, although the director cited a projection that the EU would still be consuming around 240bcm of gas in 2040, down from 335bcm last year. The bloc’s planned phase-out over the next two years of remaining Russian gas imports—which came to 36bcm in 2025—as well as declining indigenous supply, also provide an opening for new sources of supply.
Benkhadra also noted that the AAGP’s potential supplies to Europe—10–12bcm when volumes to Morocco are deducted—would represent only a minor share of the continent’s overall import mix. Rather than competing with either US and Qatari LNG, the pipeline would be complementary in terms of increasing European energy security through diversification of supply.
Still, others were less confident about the prospect of exports to Europe. The Maghreb–Europe pipeline, which would transport AAGP’s gas to Europe, lands in Spain, which has one of the most ambitious strategies among major EU economies in shifting away from fossil fuels. Spain’s government-approved energy and climate plan aims to expand renewables to almost half of final energy consumption by 2030, largely at the expense of gas demand.
The crucial test would be whether European buyers were prepared to sign take-or-pay contracts lasting 25–30 years. Without such agreements, exports to Europe are unlikely
The EU as a whole may also be reluctant to commit to the long-term gas purchase contracts that would be needed to underpin the pipeline’s exports to Europe. “Does anybody in Europe want to sign a 20-year contract with a pipeline that may or may not arrive?” said Anne-Sophie Corbeau, research scholar at the Center on Global Energy Policy at Columbia University. Such an agreement would extend beyond 2045 and potentially close to the EU’s 2050 net-zero target, making long-term commitments to unabated gas increasingly difficult to justify.
Ayuk reached a similar conclusion, arguing Europe may need additional gas in the near term but lacks the political appetite to make the decades-long commitments required to support the project. “The political will in Europe is not there for gas over the long term,” he said, even if utilities and industrial buyers remain interested in securing supply.
The crucial test would be whether European buyers were prepared to sign take-or-pay contracts lasting 25–30 years. Without such agreements, exports to Europe are unlikely, he said. Europe has increasingly spurned long-term contracts with take-or-pay clauses over recent years, favouring instead short-term and spot deals. He added European financing would also be difficult to secure.
Ayuk therefore argued that the project should focus on Africa rather than Europe as its anchor market. Without European exports, he maintained the pipeline could remain commercially and economically valuable by lowering energy costs and creating multiplier effects for West African economies.
Other challenges
The project would also have to overcome the commercial and political complexity of crossing around a dozen countries, several of which may struggle to finance their share of the infrastructure, Corbeau said, pointing to the limited success of the existing WAGP as a warning against assuming a much larger regional project would fare better.
The 678km WAGP links Nigeria with Benin, Togo and Ghana, and can transport up to 5bcm/yr. Yet even a project involving only four countries required an intergovernmental agreement, a treaty, harmonised regulation and a dedicated multinational authority before entering commercial operation in 2011.
The pipeline’s track record has been mixed. Ghana initially received substantially less Nigerian gas than contracted, with supply interruptions forcing power producers to burn more expensive liquid fuels. The pipeline was shut for almost a year after being damaged offshore Togo in 2012, while payment risk and the financial weakness of regional power utilities have repeatedly complicated cross-border energy trade.
The AAGP would be roughly ten times longer and involve more than three times as many sovereign states. Fiscal and tariff regimes must be aligned; environmental approvals coordinated; land and maritime rights secured; and rules established for third-party access, transit fees, gas quality and capacity allocations. Governments must also agree what happens if a country changes its tax regime, restricts exports, fails to pay for gas or experiences political upheaval.
The fact that the pipeline runs mostly offshore reduces exposure to some inland security risks but creates its own technical risks. It also requires agreements covering the exclusive economic zones of multiple coastal states and extensive subsea inspection and protection. Any disruption to a trunk section could affect several countries simultaneously.
The supply question
Corbeau also questioned whether Nigeria could supply the volumes envisaged. AAGP would notably be competing for potential supply with the planned Trans-Saharan Gas Pipeline (TSGP), which would carry Nigerian gas north through Nigeria and into Algeria, even though the two projects have been presented as complementary to each other.
At around 4,000km, TSGP is significantly shorter and passes through far fewer countries, but would offer less scope for the economic multiplier effects envisaged for the AAGP, as it is conceived as primarily an export corridor connecting Nigerian gas with Algeria’s established pipelines and LNG terminals. The AAGP also avoids the security challenges facing the Saharan route.
TSGP also has a planned capacity of around 30bcm/yr, and Corbeau doubted that Nigeria would be able to funnel large volumes of gas via both pipelines while also maintaining output at its existing LNG terminals and building new ones. For the sake of its own interests, Nigeria might prioritise its own LNG expansion rather than pursuing pipeline projects, she said.
Nigeria has 22mt/yr of existing LNG capacity and plans to complete a seventh train and debottlenecking project next year, which would raise output to 30mt/yr. The government has envisaged in the past building as many as 12 trains in total.
LNG offers flexibility that a fixed pipeline cannot, as cargoes can be redirected between Europe, Asia and Latin America, according to demand and prices.
For the same reasons, Mauritania and Senegal might also choose instead to ramp up LNG development, having achieved first gas from their shared 2.7mt/yr Greater Tortue Ahmeyim project at the end of 2024. A second phase, yet to reach FID, is set to add another 2.5–3.0mt/yr.
Source: Petroleum Economist
