• Saturday, February 24, 2024
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Nigeria, Algeria, Egypt offer Europe alternative to Russian gas

$1.3bn owed to IOCs halts new gas investments

Europe’s option to replace a significant proportion of Russian natural gas supply rests in existing capacity in countries like Algeria, Nigeria and Egypt, who are already turning out gas for export to Europe, experts say.

These three countries are estimated to account for fully 80 percent of African gas yields between 2022 and 2025, according to the African Energy Chamber’s State of African Energy Q2 2022 Report, drawn up in consultation with Rystad Energy.

The 2022 edition of BP’s Statistical Review of World Energy noted that these countries accounted for just a bit over 83 percent of the 257.5 billion cubic meters (bcm) of gas extracted in Africa in 2021, with Algeria contributing 100.8bcm (or more than 39 percent of the total), Egypt 67.8bcm (more than 26 percent) and Nigeria 45.9bcm (nearly 18 percent).

What’s more, they also account for the vast majority of Africa’s gas liquefaction capacity of about 75.3 million tonnes per annum (mtpa), with Algeria contributing 29.3mtpa, Nigeria 22.2mtpa, and Egypt 12.2mtpa, said analysts at the African Energy Chamber.

Algeria and Egypt have the only operational LNG plants in North Africa, while Nigeria is home to a plant that makes up nearly 66 percent of sub-Saharan Africa’s total LNG production capacity of 33.8mtpa.

Read also: Nigeria can become Africa’s energy hub, says Oseragbaje

“Algeria, meanwhile, doesn’t just have LNG; it also has pipelines. It’s already using two of them — the Medgaz and TransMed systems — to pump fuel directly to Spain and Italy across the floor of the Mediterranean Sea. Together, these two pipes are capable of handling up to 40bcm per year of gas,” said NJ Ayuk, executive chairman of African Energy Chamber.

Ayuk noted that the good news is that Algeria, Egypt, and Nigeria are already supplying a good bit of the gas that Europe has been using to supplement Russian supplies.

“Even better, they also have enough spare capacity that their plans for raising production within the next few years are realistic,” he said.

However, Nigeria’s security challenge may rain on the parade. The Nigeria LNG Limited has lost almost $7 billion revenue so far in 2022 due to gas supply constraints.

Adeleye Falade, the company’s general manager, production, in a recent conference in Lagos, said the company’s 22-million-tonnes-per-day plant’s production currently trends at 99.4 per cent year-to-date availability while utilisation hovers around 68 per cent.

He said the data between the 99.4 percent availability and the 68 percent utilisation at the moment, which was equivalent to $7 billion revenue, was part of the effect of the critical oil and gas pipelines that were shut down due to insecurity at the facilities.