Although natural gas production in Africa is expected to remain relatively stable over the next two years – increasing only slightly from 268 billion cubic meters (bcm) today to 272 bcm in 2025 – there is reason to be optimistic about the continent’s potential, according to the African Energy Chamber (AEC) report “The State of African Energy 2024 Report”.
For Africa to move forward and increase its natural gas production, a dual approach is necessary: Gas producers must continue to pump from existing fields, while countries that have made new discoveries must so that these undeveloped projects reach the final investment decision (FID) stage as quickly as possible.
A worrying drop in production
Here is the reason for this urgency: Many gas producing fields in Africa, particularly those in the north and west, are maturing or in decline, meaning they are quickly reaching the end of their productive life . For example, Nigeria, Angola and Equatorial Guinea currently account for 85% of the West Africa region’s total gas production, and the volume is expected to remain the same until 2025. Thereafter , levels will gradually decrease: 75% in 2030, 70% in 2035 and 60% in 2040. Although these fields are considered essential for sustained production, it is essential that new projects are implemented to avoid a slowdown in production. the production.
Fortunately, many gas discoveries have been announced in recent years, notably in Senegal, Mauritania, Angola, Ghana, South Africa, Namibia and Ivory Coast. In Namibia alone, Shell’s Graff discovery contains approximately 2 billion barrels of oil equivalent (BOE). These new gas discoveries, however, will remain dormant potential unless African governments and gas producers come together quickly to develop realistic and achievable plans to capitalize on these vast new resources. Otherwise, new hopes will simply fade into the past, like so many symbols of lost opportunities.
Some good news
These fields, along with newly discovered projects that are subject to a final investment decision (FID), have the potential to increase production and enable Africa to realize its enormous natural gas potential . As the AEC report highlights, any further output growth expected over the next decade will come from both pre-DIF potential – such as upstream emerging economies such as Mozambique, Tanzania, Mauritania, Senegal, South Africa and Ethiopia – and mature producers such as Nigeria, Libya and Algeria.
According to very conservative forecasts, the production of these pre-FID projects is expected to double year on year between 2025 and 2029, and continue to increase gradually until the end of the 2030s. Currently, just over 10% of the Africa’s gas production comes from these pre-FID volumes, and this proportion will increase to more than half of total production. These volumes therefore play an essential role in the continent’s aspirations to export natural gas and become a real player in international markets.
There is also much excitement about the growth of liquefied natural gas (LNG) exports in Africa. As the “State of Energy in Africa Report 2024” states:
“Africa’s LNG export infrastructure is also evolving in line with natural gas forecasts. Among the largest producers like Algeria, Nigeria and Egypt, Algeria and Egypt are expected to maintain their current LNG infrastructure capacity of approximately 29 million tonnes per annum (MMtpa) and 12.7 MMtpa , respectively. Nigeria’s plans call for increasing its LNG infrastructure capacity from 22 million tonnes per year to 30 million tonnes per year through the development of Nigeria LNG (NLNG) Train 7 and, marginally, to just over 31 million tonnes per year thanks to UTM Offshore’s FLNG project. »
In other good news, Mozambique wants to increase its LNG export capacity from 3.4 million tonnes per year currently to around 43.5 million tonnes per year by the end of the next decade – by far the increase the most important the country is likely to experience if all obstacles can be overcome. Finally, the LNG project owned by BP-Kosmos in the waters off Senegal and Mauritania is also expected to lead to an increase in the combined production capacity of the two countries, from the current 2.5 million tonnes per year to 22.5 million tonnes per year by the end of the next decade.
As I have written before, for these projects to get off the ground and come online, African governments must do everything in their power to eliminate restrictive red tape to ensure rapid turnarounds between the discovery of hydrocarbons and the final investment decision. Otherwise, their countries will miss out on the considerable benefits offered by their vast natural gas resources.
Natural gas will benefit Africa, its people and the planet
Although we live on a continent with abundant untapped natural gas resources, energy poverty is a daily reality for more than 600 million Africans. By exploiting our vast hydrocarbon resources, it is possible to transform the quality of life of these populations, industrialize their economies, build gas-fired power plants, create jobs and provide energy for clean cooking.
Fortunately, we are seeing movement in the right direction. A dozen African countries now produce their own electricity with gas that they produce themselves or that they import.
In addition to its potential to solve energy poverty in Africa, natural gas is essential to many industries. Natural gas, for example, plays a key role in the production of fertilizers used internationally to grow the food that sustains the entire world population.
Since the start of the conflict between Russia and Ukraine in early 2022, food and fertilizer prices have increased significantly as Russia began to cut off its gas supplies, limiting the production of fertilizers and creating a global market where supply is low and demand is high, leaving many farmers unable to afford the fertilizers needed for their crops. According to the United Nations, more than 60 countries, including many African states, are now struggling to import food. Not only can Africa benefit from developing its natural gas resources, but it also appears to have an obligation to do so to secure national and global food supplies.
Natural gas can also be used as a feedstock for liquid transportation fuels, paraffin, base oils and naphtha, which can generate additional revenue to help build infrastructure, create new businesses and reducing the unemployment rate. Exporting natural gas as a raw material also has many other advantages.
Gas feedstocks can be used for residential and commercial heating, and as fuel in manufacturing, the food industry and chemical production. Natural gas feedstocks can also be used in combined heat and power (CHP) systems, which simultaneously produce electricity and use waste heat in other industrial processes, thereby increasing efficiency overall. Natural gas can also be used to produce hydrogen, which is needed in various industries, including refineries, ammonia production and the emerging hydrogen economy. African leaders have a responsibility to explore the uses of natural gas and capitalize on export agreements with key players in these industries.
Exploitation of Africa’s natural gas resources will create a host of new tax opportunities. It will also enable people across the continent to earn a good living, boosting and diversifying economies through sustained long-term growth.
It is very clear to me that natural gas production in Africa is poised for cosmic growth, but I must repeat what I have already said many times: New natural gas discoveries in Africa will only remain discoveries, until leaders take a proactive approach to develop and exploit them quickly. As yet, nations are yet to fully reap the enormous benefits of their dormant resources.
I urge all African leaders to do the right thing for themselves and their people. Use the unique and lucrative opportunities that natural gas offers, monetize your gas, grow your economies and provide your populations with access to energy and a decent standard of living.
For more information on the new African Energy Chamber report, visit https://energychamber.org .
