Nigeria and Morocco are moving closer to advancing their long-planned transcontinental gas project, with both countries set to sign an intergovernmental agreement this year for the $25bn pipeline.

The deal is expected to formalise political and regulatory commitments for the ambitious initiative, marking a key milestone in the development of the proposed 6,900-kilometre African Atlantic Gas Pipeline.

The network is designed to transport natural gas from Nigeria through West Africa to Morocco and onward to Europe, according to Reuters on Monday.

The report read, “An intergovernmental agreement on a planned $25 billion Nigeria-Morocco gas pipeline will be signed this year, the head of Morocco’s hydrocarbons and mining agency said.”

Speaking to Reuters, the Director-General of the Office National des Hydrocarbures et des Mines, Amina Benkhadra, said the planned intergovernmental agreement would strengthen institutional coordination among the participating countries.

“Following the intergovernmental agreement, a high authority for the pipeline will be established in Nigeria, bringing together ministerial representatives from each of the 13 participating countries to provide political and regulatory coordination,” she said.

The pipeline project, first conceived around a decade ago, has progressed through major preparatory phases, including feasibility studies and front-end engineering design, reflecting steady momentum despite global financing constraints.

Benkhadra said the infrastructure would be rolled out in phases to enable early economic benefits, rather than waiting for a single, comprehensive final investment decision.

“The project does not rely on a single global final investment decision. Each segment is designed to be developed as a standalone system to allow for early value build-up,” she said.

She added that the pipeline is projected to have a maximum annual capacity of 30 billion cubic metres, with roughly 15 billion cubic metres allocated for Morocco’s domestic consumption and exports to European markets.

She said, “The African Atlantic Gas Pipeline will run along a hybrid offshore-onshore route covering approximately 6,900 kilometres. It will not only supply Morocco but also support exports to Europe, positioning Morocco as a key energy bridge between Africa and Europe.”

To advance implementation, Benkhadra said a project company would be set up in Morocco as a joint venture between the Nigerian National Petroleum Company Limited and the Office National des Hydrocarbures et des Mines, tasked with overseeing execution, financing, and construction.

“A dedicated project company will be created as a joint venture between ONHYM and NNPC to lead the execution, financing, and construction phases of the pipeline,” she added.

She added, however, that despite strong investor interest, definitive funding commitments have not yet been finalised, as the project company plans to raise a blend of equity and debt to finance the development.

“The project is attracting strong interest due to its scale, its phased structure, and its strategic positioning. The financing structure will be led by the project company, which will mobilise a mix of equity and debt,” Benkhadra said.

The pipeline is projected to significantly reshape West Africa’s energy landscape by enhancing power generation, driving industrial growth, and strengthening regional integration.