Natural Gas Represents Tremendous Opportunities For Africa — We Must Seize Them Now 3 min read

Although Africa’s natural gas production is expected to remain relatively flat over the next two years — increasing only slightly, from 268 billion cubic meters (bcm) today to 272 bcm in 2025 — there’s room for optimism about the continent’s potential, according to the African Energy Chamber’s (AEC) “The State of African Energy Q1 2023 Report.”

For Africa to move forward and grow its natural gas output, a two-pronged approach is required: Gas producers must continue to pump from existing fields while countries with new discoveries must get these undeveloped projects to the final investment decision (FID) stage as quickly as possible.

A Worrying Decline in Production

Here’s the reason for the urgency: Many of Africa’s existing gas production fields, particularly those in the north and west, are maturing or in decline, meaning they are quickly reaching the end of their productive lives. For example, Nigeria, Angola, and Equatorial Guinea currently account for 85% of the total gas output from the West Africa region, and volume is expected to remain the same until 2025. After that, levels will gradually decline: to 75% by 2030, 70% by 2035, and 60% by 2040. Although these fields are considered crucial for sustained production, the need for new projects to come online is critical to prevent a stall in output.

Fortunately, many major new gas finds have been announced in recent years, including finds in Senegal, Mauritania, Angola, Ghana, South Africa, Namibia, and the Ivory Coast. In Namibia alone, Shell’s Graff discovery holds approximately 2 billion barrels of oil equivalent (BOE). These new gas discoveries will, however, remain dormant potential unless African governments and gas producers come together quickly to forge realistic actionable plans to capitalize on these vast new resources. Otherwise, new hopes will simply fade into the past as yet more symbols of lost opportunity.

Some Good News

These fields along with newly discovered pre-final investment decision (FID) projects have the potential to supercharge output and allow Africa to realize its enormous natural gas potential. As the AEC report notes, any new production growth expected over the next decade will come from both pre-FID potential — such as emerging upstream economies like Mozambique, Tanzania, Mauritania, Senegal, South Africa, and Ethiopia — as well as from mature producers like Nigeria, Libya, and Algeria.

At a very conservative forecast, production from these pre-FID projects is expected to double year-on-year from 2025 to 2029, with a continued gradual increase until around the late 2030s. Currently, just over 10% of Africa’s gas production comes from these pre-FID volumes and will increase to over half of the total output. Therefore, these volumes play a critical role in the continent’s natural gas export aspirations, and in becoming a true player in international markets.

There is also great excitement building around the growth of Africa’s liquefied natural gas (LNG) export business. As “The State of African Energy Q1 2023 Report” asserts: “Africa LNG export infrastructure also is shaping in a similar way to the natural gas forecast. Between the bigger producers like Algeria, Nigeria and Egypt, Algeria and Egypt are expected to maintain their existing LNG infrastructure capacity of about 29 million tonnes per annum (MMtpa) and 12.7 MMtpa, respectively. Nigeria’s plans involve increasing its LNG infrastructure capacity from the existing 22 MMtpa to 30 MMtpa via the Nigeria LNG (NLNG) Train 7 development and further marginally to just over 31 MMtpa via UTM Offshore’s FLNG project.”

By NJ Ayuk