Adedapo Adesanya
By Adedapo Adesanya
It has been projected that the Train 7 expansion project would increase Nigeria’s Liquefied Natural Gas production (LNG) by 35 percent, from 22 million tonnes per annum to 30 million. Nigeria accounts for over 50 percent of current LNG production capacity on the continent and final investment decision is billed for October.
Earlier in August, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari expressed ‘what else can we do beyond Train7 to expand NLNG oprations.
This follows the estimate that Africa is an exciting frontier in the global natural gas sector as the continent holds 7.1 percent of proven global gas reserves and is expected to contribute nearly 10 percent of global production growth through to 2024.
Nigeria sets the pace for other Africa’s large, urbanized and industrialized societies of the future which will require reliable and sustainable power generation and with Greenfield investments in Nigeria, Egypt, Mozambique and elsewhere reaching nearly $103 billion this year it is clear that liquefaction is viewed as the most profitable strategy for realizing Africa’s gas potential.
Like Nigeria, Egypt has successfully re-established itself as an important investment destination following the downturn in the gas sector in 2014. In the first half of 2019, the behemoth Zohr offshore as field produced 11.3 billion cubic meters – 3.6 times more than it did in the first half of 2018.
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 liquification 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.
On its part In June, Anadarko gave its final approval for a $20 billion 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 $14.7 billion Area 4 development – FID is expected before the end of the year. Meaning that with political stability and access to East Asian markets could see Mozambique become a major global gas market over the next decade.
South Africa – the most industrialized economy on the continent – is not exempted and could be an influential market, as heavy coal consumption and unreliable power generation make natural gas an attractive solution to diversify its power generation base. In 2020, Transnet – a state-owned freight logistics firm – is set to launch a tender for the development of an LNG import terminal at Richards Bay Port as The World Bank’s International Finance Corporation has committed $2 million to fund the project planning.
Investors are also paying attention to smaller projects in countries like Mauritania, Senegal and Cameroon.
These and other recent developments reflect a growing and diverse African LNG sector. From top-tier Greenfield developments to faster-to-market, agile FLNG operations; massive new discoveries to expanding existing liquefication infrastructure.
