One of our trending stories from last week caught my attention as it relates to the gas industry on the west coast of Africa.
Gas + west coast, automatically = Nigeria.
Famous for its gas reserves but continuing struggles to overcome losses to flaring and theft along its vast pipelines, Nigeria is ablaze with opportunity. The government has even given gas flaring a new look, with a discussion around the proposed Nigerian Gas Flare Commercialisation Project.
However, I digress. Our assumption that the trending gas story relates to Nigeria is wrong! And that is why it sparked my interest.
On the west coast of Africa, the lesser-known gas country of Equatorial Guinea is set to construct the first liquefied natural gas (LNG) storage and regasification plant in the region.
It forms part of an unfolding strategy to monetise gas resources through domestic gas-to-power infrastructure.
In support of this objective, the country also launched its LNG2Africa programme to facilitate the production and intra-African trade of LNG.
Other ventures in Equatorial Guinea include oil, gas and mining licensing rounds offering up 24 offshore and two onshore blocks.
These are bold steps in the right direction, don’t you agree?
For investors and developers, Africa is an exciting frontier in the global natural gas sector. The African LNG market is said to hold 7.1% of proven global gas reserves.
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If the market holds firm and policy – such as mentioned above – continues to dispel fears, Africa’s LNG contribution to global production could reach 10% by 2024.
A concern though is always around supply and demand ratios in the African energy space.
I would not play it too safe; as our increasingly urbanised and industrialised societies are set to create a sturdy demand side to address the desired levels of reliable and sustainable power supply.
Since Nigeria accounts for over 50% of the current LNG production capacity on the continent, it remains the automatic go-to-market; however, I suggest keeping a close watch on Equatorial Guinea.
Until next week.
Originally published in the ESI Africa weekly newsletter on 2019/08/28