• Thursday, July 25, 2024
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Gas production in Africa doubles in 21 years, Nigeria may lose dominance

gas production

Natural gas is proving to be the only hydrocarbon source to increase its share in the global energy mix and the fastest-growing fossil fuel; this will see production double in Africa in the next two decades.

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This is according to the Gas Exporting Countries Forum’s (GECF) Global Gas Outlook Model. GECF member countries currently represent 71 percent of natural gas reserves, 44 percent of marketed gas production, 55 percent of pipeline gas trade and 53 percent of Liquefied Natural Gas trade globally. Some of the members include Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, The United Arab Emirates and Venezuela.

The African continent is set to increase its presence in the global energy sphere, more than doubling its natural gas production by 2040 and altering the global energy supply mix in the process. Africa will contribute as much as 9.2 percent to global natural gas production by 2040, resulting in an expansion from 255 billion cubic metres (bcm) to more than 505 bcm and corresponding to a compound average annual the growth rate of 3.4 percent.

“Natural gas will continue to be in demand and will help us meet the objectives of sustainable development and the energy transition for our country, for Africa and for the world,” Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea said at the just concluded GECF event in Malabo. “We are working on the gradual implementation and exploration of various gas fields. All of the work that we are doing is in line with the policies that the international community is asking us to have for fossil fuels. We want to protect the environment and provide for the needs of remote communities in rural Africa.” 

Nigeria holds Africa’s biggest gas reserve of 5,720 bcm (202 trillion cubic feet), almost 50 percent of Africa’s total gas reserves (509 tcf) but may lose dominance to more aggressive and strategic but smaller African peers.  Tanzania and Mozambique are preparing for the gas age.

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The East African duo have the sub-regions brightest projects, located on the south-east coast of the continent in Tanzania and Mozambique. The massive Coral South Floating Liquefied Natural Gas (FLNG) Project sits atop the prolific Rovuma Basin, offshore Mozambique. ENI’s Coral South FLNG facility is the first step in accessing the estimated 450 billion cubic metres of gas. The first gas is expected in 2022 and thereafter ENI expects to produce five billion cubic feet each year.

Further north is the Tanzania LNG Project that hopes to access the massive 1.6bn cubic metres of gas that lies in Tanzanian acreages. The $30bn facility located at Lindi would sit on Tanzania’s coast, acting as a terminal and gas liquefaction hub.

Admittedly, Nigeria has more complex issues to deal with; this is probably also why investors avoid the country. Nigeria’s gas resources management has been evolving but over-regulation has kept it at its infancy, analysts say.

“The gas Nigerians are consuming today was explored over 20 to 30 years. We are not carrying out new explorations and this takes away from Nigeria’s future competitiveness in the gas space. Ghana is considering sending ganjs to Nigeria because they now have more than they needed,” Emmanuel Anyaeto, head, gas demand and supply at Axxela a fast-growing gas & power portfolio company said at BusinessDay’s recent Oil & Gas Roundtable in Lagos.

West African peers, Mauritania and Senegal have also disposed of both political and infrastructural resources to develop their new discoveries of gas reserves, these countries will compete with Nigeria for market share as gas utilisation gains traction.