China as part of its Belt and Road Initiative is to build the longest oil pipeline in Africa which will carry crude oil from Niger to Cotonou port
Niger’s military authorities have launched the first phase of a 2,000-kilometer-long pipeline that will carry crude oil to neighboring Benin, AFP reported this week.
According to the report, the commissioning ceremony was held at the Agadem oil site, more than 1,700 kilometers (around 1,500 miles) from the capital, Niamey, in the desert region of Diffa.
The resources from exploitation will be used to “ensure the sovereignty and development” of the country, Nigerian Prime Minister Ali Mahaman Lamine Zeine was quoted as saying at the ceremony on Wednesday. The pipeline’s commissioning will allow Niger to sell its crude on the international market for the first time via the Benin port of Seme.
AFP wrote that over $6 billion has been invested in the project, including $4 billion to develop the oil fields and $2.3 billion to construct the pipeline.
Construction of the project, led by the China National Petroleum Corporation (CNPC), is expected to generate additional traffic to the Port of Cotonou in Benin. The port is expected to process up to 300,000 tons of goods once the pipeline becomes operational.
The pipeline’s commissioning comes during sweeping sanctions imposed by the Economic Community of West African States (ECOWAS) and the European Union on the country after the July 26 military coup.
In August global credit rating agency, Moody, downgraded Niger’s long-term foreign and local currency issuer ratings on Wednesday from B3 (judged to have speculative elements and a significant credit risk) to Caa2 (rated as poor quality and very high credit risk) and place them under review for further downgrade.
In a press release announcing the downgrade, Moody’s warned that if maintained, the sanctions “will likely prevent Niger from making upcoming principal or interest payments to creditors outside the country which would constitute a default under Moody’s definition.”
About 80% of Niger’s outstanding local currency debt is held by other West African countries.
Niger, a landlocked country in West Africa, is one of the world’s poorest nations, receiving close to $2 billion a year in development aid.
Niger also has a critical stock of natural resources, including uranium, coal, gold, iron ore, petroleum, molybdenum, and salt. It is the world’s seventh-biggest producer of uranium.