Sub-Saharan African economies have a huge opportunity for gas developments, emanating from the widely under-utilised gas resources at their disposal, albeit, exposed to volatilities, Globaldata indicates.
Looking at current trends, new entrant countries are showing enormous gas supply potential for the region. However, the likelihood of commencement is being suppressed by ongoing civil unrest and domestic instability that is hindering progress to that effect.
For the past couple of years, sub-Saharan Africa has experienced slow and steady growth in both demand and supply of the commodity as countries begin to develop their gas resources.
The region is waiting on a significant gas supply boom coming from projects under construction and in the pipeline. However, many countries are struggling to significantly break into the expanding LNG market besides Angola and Nigeria.
Conor Ward, Oil & Gas Analyst at GlobalData, commented: “The newcomers to the market over the next decade, most notably Mozambique, Mauritania, and Senegal could bring an additional 20 mtpa of LNG to market by 2025.
“The majority of this new capacity is due to come from Mozambique’s Rovuma LNG totalling 15.2 mtpa, however, the project continues to experience delays and it is becoming increasingly unlikely that this capacity will be seen within the decade due to ongoing instability in the country.”
Conor Ward, Oil & Gas Analyst, GlobalData
In Mauritania and Senegal, British Petroleum (BP) lifted its force majeure last year. The long awaited Tortue project should therefore have its first LNG in 2023, adding 2.5 mtpa for each country.
Volatilities associated with gas production
Meanwhile, Total SE, the operator of the Mozambique LNG development, recently instituted a force majeure, citing danger to staff as a result of civil unrest. As a result, the participants of the Mamba Complex have continued to delay final investment decision.
This has led Total SE to move to re-assess the market in light of the upcoming mega-projects in Qatar. The projects, per expectations, will come online in the next few years. Golfinho-Atum along with the Mamba Complex would account for 10% of globally planned and announced LNG projects by 2030, however, this timeline is now becoming harder to see.
He further stated that: “On the flipside, the region is showing signs of a growing gas reliance with aims to increase the use of the fuel in power generation to replace coal or diesel.
“With this in mind, Ghana has become the first Sub-Saharan African nation to construct a regasification terminal in Tema to secure its long-term gas supply and will have sufficient capacity to meet almost the entirety of the country’s demand for the fuel.
“With the growth of regasification in the region. This will provide greater supply flexibility and reduce reliance on pipelines that have been prone to disruption.”
Conor Ward, Oil & Gas Analyst, GlobalData
For Ghana, this move has come under intense criticism from analysts, with concerns raised from the financial risks involved.
“There is vast potential for gas in the region, however, projects continue to be delayed whether it be due to civil unrest or lack of fiscal incentive and while the region has potential for significant growth, particularly in Mozambique, the current hurdles must be overcome to achieve this growth,” he further opined.
