ECOWAS endorses $27bn Nigeria-Morocco pipeline
Member states of the Economic Community of West African States signed the intergovernmental agreement for the African Atlantic Gas Pipeline (AAGP) at the ECOWAS Summit in Freetown, Sierra Leone, according to reporting from July 28. Nigeria's federal government described the unanimous endorsement as a "landmark step towards strengthening regional energy security, deepening economic integration and advancing sustainable development across West Africa." Minister of State for Petroleum Resources (Gas) Ekperikpe Ekpo, who attended as part of Nigeria's delegation led by Vice President Kashim Shettima, called the agreement a "defining milestone" that moved the project "decisively from vision to implementation."
Pipeline route and strategic objectives
A joint statement from Morocco's National Office of Hydrocarbons and Mines (ONHYM) and the Nigerian National Petroleum Company Limited (NNPC Ltd) said the pipeline is designed to transport up to 30 billion cubic metres of natural gas per year from Nigeria and West Africa through 13 West African countries to Morocco. The project is intended to unlock regional gas resources, integrate African energy markets, and establish a development corridor linking West Africa, the Sahel, Morocco, and Europe. The signing gives practical effect to approval granted at the 66th Ordinary Session of the ECOWAS Summit in Abuja in December 2024 and concludes the institutional process stemming from the 2022 memorandum of understanding between Nigeria and Morocco.
European gas storage levels trail seasonal norms
European gas storage facilities are 55% full, lower than is typical for this time of year, according to experts cited in July 28 reporting. Elenger CEO Margus Kaasik said the forecast is for storage levels to reach a maximum of around 75% under normal conditions, with a lower estimate of 70% or less, compared with 83% last year. Kaasik added that Estonia's gas reserves held in Latvia's Inčukalns storage facility are in fairly good shape, with 11 terawatt-hours currently in storage and the realistic prospect of 12 to 15 terawatt-hours by the end of autumn. Peak levels have exceeded 20 terawatt-hours during periods of major price fluctuations.
Estonia's reserves and stockpile status
Alan Vaht, a member of the management board of Estonian fuel company Terminal, highlighted an OECD overview of strategic and commercial stockpiles, noting that global reserves are at their lowest level since 1990, Europe's commercial reserves are at a 12-year low, and US strategic fuel reserves are at their lowest since 1983. In the spring, the International Energy Agency allowed member states to use up to one-third of their strategic fuel reserves, which are normally required to cover 90 days of consumption. Estonia drew on those reserves, and the State Stockpile Center now holds enough petrol for 56 days, diesel for 90 days, and jet fuel for 77 days.
Rebuilding reserves hinges on Hormuz shipping
Experts cautioned that rebuilding reserves will take considerable time even if the conflict with Iran ends. Kalvi Nõu, head of Alexela's energy portfolio, said a rapid return to pre-war levels is unlikely and would require normal shipping through the Strait of Hormuz for at least six months. Vaht added that August and September are the months when fuel companies across Europe negotiate next year's fuel deliveries to supply filling stations, and that the most serious question will be the price refineries ask. August and September price negotiations and any further IEA coordination on stockpile replenishment are the next verifiable milestones tied to these developments.
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