(Bloomberg) — An investment decision on a $25 billion gas pipeline from Nigeria to Morocco that could supply the fuel to Europe will be taken next year, the head of the West African nation’s state oil company said.
The Nigerian National Petroleum Co. and Morocco’s National Office of Hydrocarbons and Mines signed a memorandum of understanding last month that inched the long-gestating project closer to reality. The conduit is one of two such initiatives the NNPC is promoting in an effort to capitalize on European demand for new sources of gas after Russia’s invasion of Ukraine.
“We will take a final investment decision next year,” NNPC Chief Executive Officer Mele Kyari said in an interview in Abuja, Nigeria’s capital. Discussions around financing are ongoing, he said, without disclosing the institutions interested in backing the 5,600-kilometer (3,840-mile) pipeline that would deliver gas to 11 countries along the African coast on its way to Morocco, before connecting to Spain or Italy.
The 15-nation Economic Community of West African States is also a signatory to the MOU.
The project will cost $20-25 billion to build and will be constructed in phases, according to Kyari, who anticipates the first segment would take three years to finish and the others five years. Following a previous agreement in 2018, the Moroccan state agency MAP said the pipeline could take as long as 25 years to complete. Nigeria’s gas exports are currently limited to shipments from Nigeria LNG Ltd., a joint venture between NNPC and international energy companies including Shell Plc and Eni SpA.
Read: Nigeria-Morocco Pipeline Inches Toward Providing Gas to Europe
Nigeria possesses Africa’s largest proven gas reserves at about 200 trillion cubic feet, most of which is untapped, flared or re-injected into oil wells. The government says it wants to monetize much more of that resource, for domestic use and export, to replace crude as the country’s key commodity. Quadrupling gas production in the next four years is “very realizable,” according to Kyari.
The NNPC has also revived a longstanding proposal for a separate transcontinental gas pipeline that would travel about 4,400 kilometers through the Sahara Desert to Algeria for onward transport to Europe.
“We have seen the opportunity to bring back every gas pipeline project that you can think of,” Kyari said. “It is a matter of who needs it and who’s ready to pay for it.”
A more immediate concern for Nigeria is its oil output, which has been declining steadily since 2020 and hit a multi-decade low of less than 1.2 million barrels per day in August. Kyari and the government blame massive levels of theft and vandalism on the pipelines that crisscross the Niger Delta.
Illegal Pipeline
Nigerian security forces recently uncovered an illegal pipeline connected to an onshore facility that had transported pilfered crude 4 kilometers out to sea “undetected” for nine years, Kyari told lawmakers last week.
While the OPEC+ alliance agreed Oct. 5 to slash global daily output by 2 million barrels, Nigeria is trying to reverse its slump and raise output to its quota permitted by the cartel. The country can add an additional 500,000 barrels a day before the end of November by reopening the Shell-operated Trans-Niger Pipeline and Forcados terminal and introducing new evacuation routes, Kyari said.
The NNPC hired new private security contractors in August to protect the pipelines, some of which are connected to militant leaders that once waged a war against the oil companies before accepting a government amnesty in 2009.
Read: Ex-Militant Tapped to Protect Nigerian Pipelines He Once Blew Up
Recently transformed into a fully commercial venture, the NNPC is eyeing expansion in multiple areas. Kyari said he is “creating the largest upstream company in the country and potentially in Africa,” although he declined to comment on the firm’s efforts to acquire permits that Exxon Mobil Corp. agreed to sell to Seplat Energy Plc.
The NNPC has already added 380 filling stations to its fuel retail business through the purchase of Lagos-based OVH Energy Marketing Ltd. that was announced this month. The company is also looking to grow its presence in the power sector, both by building new gas-fueled power plants and buying facilities put up for sale by Nigeria’s privatization agency, Kyari said.
The company will be “IPO ready” next year, according to Kyari. It will be up to the government, however, to decide whether and when to list shares, he said.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
