Attacks and diplomatic disputes are hampering oil flows through a China-backed pipeline running from Niger to Benin's coast.

A China-backed pipeline that would make Niger an oil-exporting country is being threatened by an internal security crisis and a diplomatic dispute with neighoring Benin, both as a result of last year’s coup that toppled the West African nation’s democratic government.

The 1,930-kilometer (1,200-mile) pipeline runs from Niger’s Chinese-built Agadem oil field to the port of Cotonou in Benin. It was designed to help the oil-rich but landlocked Niger achieve an almost fivefold increase in oil production through a $400 million deal signed in April with China’s state-run national petroleum company.

But it has been stalled by several challenges, including the diplomatic disagreement with Benin that led to the pipeline’s closure last week. There also has been an attack this week by the local Patriotic Liberation Front rebel group, which claimed to have disabled a part of the pipeline and is threatening more attacks if the $400 million deal with China isn't canceled.

The group, led by Salah Mahmoud, a former rebel leader, took up arms after Niger's junta came to power, posing further security threats to the country, which is already struggling with a deadly security crisis.

Analysts say the crises could further hurt Niger, one of the world’s poorest countries which funds most of its budget with now-withheld external support in the aftermath of the coup.

Niger currently has a local refining capacity of only 20,000 barrels per day (bpd) for local demands while the pipeline is to export up to 90,000 barrels daily — a feat officials and analysts have said would help the country shore up its revenue and emerge from the coup sanctions that had isolated it from regional neighbors and hurt its economy and people.

“It is a completely messy situation and the only way for a resolution is if both administrations directly engage and resolve issues,” said Ryan Cummings, director of Africa-focused security consulting company Signal Risk.

One major concern is how the stalled pipeline operation might impact Niger’s overall economic growth. The World Bank had projected that the West African nation’s economy would rebound and grow the fastest in Africa this year at a rate of 6.9%, with oil exports as a key boost.

The diplomatic tensions with Benin date back to July when Niger’s president, Mohamed Bazoum, was deposed in a coup, resulting in West African neighbors closing their borders with Niger, and in the formation of the so-called local liberation group now threatening more attacks on the oil project.

Benin, alongside other neighbors, has reopened its border with Niger, but Nigerien officials have refused to open theirs, accusing Benin of hosting French troops that pose a threat to the country after Niger severed military ties with France. That has led Benin’s president, Patrice Talon, to make the oil exportation through its port conditional on the reopening of the border.

Both countries are losing out economically, with Benin also being deprived of millions of dollars in transit fees. Observers say the impasse is worsening regional tensions since the coup, which came after a string of other military takeovers. It has pitched Niger against the Economic Community of West African States, or ECOWAS, which usually mediates on such issues.

With Niger tilting towards Russia in its diplomatic shift and Benin aligned with France and the West African bloc, China has tried to step in and resolve the impasse and benefit from its investment in the project.

But even Beijing’s efforts, which resulted in the first lifting of oil from the Agadem field in May, collapsed as the diplomatic spat escalated further.

Benin this week convicted and imprisoned three of five Nigerien oil workers it recently arrested at the Beninise port after they crossed from the border and were accused of “use of falsified computer data.” Their arrests prompted Niger to shut the pipeline last week, with a senior government official alleging that their oil is being “stolen by other people.”

A big concern for Niger’s military government at this stage is “whether they have the requisite fiscal capacity to keep paying for public services” following the coup, which has made it unable to meet some of its financial obligations such as debt repayment and infrastructural funding, Cummings said.

The junta in Niger "definitely have to be more cautious in handling the financial position of the country” amid the ongoing crises, he said.

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Niger confirms anti-junta rebels behind oil attack

The oil pipeline between Niger and Benin was formally launched in November.

Niger’s junta has confirmed that rebels damaged an oil pipeline carrying crude oil to neighbouring Benin.

The Patriotic Liberation Front, which is fighting for the release of former president Mohamed Bazoum, who was overthrown in a coup last July, said it was behind the attack earlier this week.

It has threatened to target oil installations and called on the Chinese companies that run the pipeline to end their support for the military regime.

It is the latest setback to hit the newly opened 2,000km (1,243-mile) pipeline as relations between Niger and Benin continue to sour.

State media said the “malicious individuals” who had sabotaged part of the pipeline would be apprehended and prosecuted.

"We know which group is the author of the act [and which also] claimed [it]," public prosecutor Ousmane Baydo is quoted by the AFP news agency as saying.

Footage aired on state-run broadcaster Tele Sahel on Friday evening showed the damage in Niger's southern Zinder region, with an oil spill stretching out into the bush.

The pipeline was formally launched at the end of last year and links Niger's Agadem oilfield to Benin’s coast - and is set to be vital to both economies.

But its future has been in jeopardy following last year’s coup, when regional sanctions were imposed on Niger.

In February, the regional bloc Ecowas agreed to lift them and borders were allowed to be reopened.

Benin’s economy had also been hit by trade block and was anxious for imports and exports to resume.

But Niger decided to keep its borders closed to goods from Benin, alleging its neighbour was hosting French forces that were training others to destabilise Niger.

The junta in Niger views France with suspicion and has established closer ties with Russia since coming to power. It kicked out French troops who had been in the West African state to fight militant Islamists threatening stability across the region.

France maintains it has no bases in Benin and such allegations are part of disinformation campaigns against the former colonial power.

Nonetheless the refusal to reopen the land border, usually busy with lorries driving back and forth, prompted Benin to block Niger’s inaugural oil exports.

China stepped into ease tensions - and Niger did manage to join the world of oil exporters, its first batch of crude leaving Benin at the end of May.

But the spat between Benin and Niger has continued.

Earlier this month five Niger nationals were arrested at an oil port in Benin on impersonation charges - and a loading of second crude shipment was reportedly aborted.

Three of the Nigeriens were given 18 months suspended sentences - and all of them, who worked for the Chinese oil firm running the pipeline, were expelled and flown to Niamey on Friday.

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