HomeRegional NewsAfricaAfrican gas market trends show massive growth expected

African gas market trends show massive growth expected

The African gas sector is expected to boom in 2018, as the region begins to recover economically and investment increases.

Governments in West African countries are increasing their efforts to secure stable gas supply to enhance power generation capacity and rely less on revenue generated by crude oil.

This includes developing pipelines, floating liquefied natural gas (FLNG) platforms and major gas field projects.

Gas discoveries are stimulating sector growth and infrastructure development in the following countries; Mozambique, Kenya and Tanzania on the east coast, while the emergence of shale gas and the strategic environmental assessment commissioned by the South African government leads the way for exploration on the continent.

At the end of 2016, Africa had proven natural gas reserves of 503.3 Tcf (trillion cubic feet), indicating an increase of around 1% in total gas reserves on the continent. Though, 90% of gas production continues to come from Algeria, Nigeria, Egypt and Libya.

Gas market investment

According to the International Energy Agency (IEA) natural gas will take the lead in meeting the world future energy needs, and demand will grow faster than oil and coal at 1.6% per year over the next five years.

Growth in the sector will be stimulated by low prices, abundant supply, as well as its role in producing a cleaner energy source.

The growth of the global natural gas market is spurred on by the availability of shale gas and increased trade of liquid natural gas (LNG), setting the stage to be the world’s primary fuel source by 2050.

The current lack of infrastructure and connectivity between remote demand centres is also viewed as a significant opportunity for market growth in Africa. Also hundreds of thousands of kilometres of pipelines are yet to be laid.

As African countries move toward gas-based economies and deregulate the market, the result will be greater investment in all areas of the supply chain, from utilising flared gas to transportation of gas from offshore fields.

With the increase in renewables and the uncertain future of coal and nuclear, opinions hold that natural gas is a fossil fuel that will remain a significant part of the energy mix for decades to come.

Its role in decreasing the carbon footprint and improving the economics of large-scale carbon capture and storage for gas power generation ensures that independent power producers are constantly looking for market entry.


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