Liquefied Natural Gas projects in Nigeria, Egypt, Mozambique and subsequently on the African continent are foreseen to attract nearly $103bn investments this year.
According to a statement ahead of the 5th Gas Summit of the Gas Exporting Countries’ Forum in Malabo, Equatorial Guinea, gas liquefaction is seen as the most profitable strategy for realising Africa’s gas potential.
“Africa is an exciting frontier in the global natural gas sector. The continent holds 7.1 per cent of proven global gas reserves and is expected to contribute nearly 10 per cent of global production growth through to 2024,” the statement said.
It said on the demand side, Africa’s large, urbanised and industrialised societies of the future would require reliable and sustainable power generation.
According to the statement, Nigeria accounts for over 50 per cent of the current LNG production capacity on the continent, with October 2019 seeing a final investment decision on the $12bn expansion of the country’s liquefaction plant at Bonny Island in Rivers State.
It said the Train 7 expansion project would increase Nigerian LNG production capacity by 35 per cent, from 22 million tonnes per annum to 30 million, adding that current indications pointed to a positive verdict.
The statement said in North Africa, Egypt had successfully re-established itself as an important investment destination following the downturn in the gas sector in 2014.
It said, “In the first half of 2019, the behemoth Zohr offshore gas field produced 11.3 billion cubic metres – 3.6 times more than it did in 1H2018. The success is set to continue with reports earlier this year of a new Eni discovery in the Nour North Sinai Concession.
“Evaluation is ongoing but there are hopes that the new field could rival the Zohr, which would open significant opportunities for investment in new liquefication plants. In February, the Egyptian Natural Gas Holding Corporation awarded five new gas exploration concessions to Shell, ExxonMobil, Petronas, DEA and Eni in which it expects to see 20 wells drilled.”
In June, Anadarko gave its final approval for a $20bn gas liquefaction and export terminal in Mozambique. The Area 1 project is the single largest LNG project ever approved in Africa, and it could be closely followed by Exxon’s $14.7bn Area 4 development – FID is expected before the end of the year, according to the statement.
The statement said political stability and access to East Asian markets could see Mozambique become a major global gas market over the next decade.
It said, “Investors are also paying attention to smaller projects in countries like Mauritania, Senegal and Cameroon. Operators have been successfully able to deploy floating liquefied natural gas technology to realise the value of smaller assets in these markets and this could be a continuing trend in 2020 and beyond. Eni and partners are considering a $7bn FLNG for the Coral South field in Mozambique.
“In terms of African demand for the LNG, South Africa – the most industrialised economy on the continent – could be an influential market. In 2020, Transnet – a state-owned freight logistics firm – will launch a tender for the development of an LNG import terminal at Richards Bay Port. The World Bank’s International Finance Corporation has committed $2m to fund project planning.”
