African LNG to Attract $103Bln in 2019

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, said Gas Exporting Countries Forum (GECF).

Africa is an exciting frontier in the global natural gas sector. 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 accounts for over 50 percent of current LNG production capacity on the continent. With October 2019 seeing a final investment decision on the $12 billion expansion of the country’s liquefaction plant at Bonny Island in Rivers State.

The Train 7 expansion project would increase Nigerian LNG production capacity by 35 percent, from 22 million tons per annum to 30 million. Current indications point to a positive verdict. The twenty-year-old facility is owned and operated by a consortium which includes NNPC, Shell, Total and Eni.

In North Africa, 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 gas field produced 11.3 billion cubic meters - 3.6 times more than it did in 1H2018.

In June, Anadarko gave its final approval for a $20 billion gas liquefaction and export terminal in Mozambique.

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 (FLNG) technology to realize 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 $7 billion FLNG for the Coral South field in Mozambique.

In terms of African demand for LNG, South Africa – the most industrialized economy on the continent – could be an influential market.

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 – 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 $2 million to fund the project planning .

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. It is an exciting time to be involved, as demonstrated by the high-profile speakers taking part in this year’s Gas Exporting Countries’ Forum, be hosted by Equatorial Guinea in Malabo.