Sunday Ojeme 
CAPACITY
Leading and emerging gas producing countries in Africa required massive investments on infrastructure
As more European nations gradually turn their backs on Russia for liquefied natural gas need, Nigeria and other nations with massive gas presence have been advised to boost their infrastructure in order to further penetrate the global market.
According to a report released by African Energy Chamber, sub-Saharan Africa, for instance, can boost its LNG exports to 60 million tons per year (mt/year) by 2025 and approve an additional 74 million mt/year by 2030.
It noted that global energy transition policies were pushing for an increase in the use of gas as a transactional energy resource, thereby increasing the demand for LNG, stressing that this provides a huge opportunity for African hydrocarbon producing countries to monetise LNG.
Specifically, the chamber observed that leading and emerging gas producing countries in Africa such as Nigeria, Mozambique, Niger and Tanzania required massive investments to be made to develop infrastructure that enables production to increase and LNG exports to improve.
Africa has been identified as well positioned to become a global energy hub with a number of projects operating and an increasing number already in the pipeline.
Notable investments made in gas production in Africa include that of Nigeria in a joint venture between Shell, TotalEnergies and Nigeria LNG where they are modernising the Train 7 LNG terminal on Bonny Island to allow an increase in gas exports. Nigeria has 190 tcf of proven gas reserves – the largest in Africa. In 2021, the country exported approximately 23.3 bcm to Europe, and with the right infrastructure in place, this figure could increase dramatically.
The report said: “Although international majors and national oil companies have already made significant progress regarding investments and developments to enhance LNG production across Africa, additional funding is required to develop LNG terminals to enable energy exports to international markets.
“Despite international investors restricting hydrocarbon investments, the need to replace Russian gas provides critical opportunities which Africa can leverage to develop its infrastructure. As the international community looks to reduce the reliance on Russian gas, European states have already started to seek alternative gas suppliers.
Africa, with its massive gas reserves and production potential, could provide the capacity to assist European countries. “As a result, African producers need to prioritize the development of capital attractive regimes that enable deals with European countries to be signed.
Additionally, African governments need to create a political and business environment that encourages regional and international financial institutions and oil and gas majors to invest in infrastructure development while seeking out alternative capital raising solutions.
“For instance, Africa can also look towards Asian banks that are still willing to fund oil and gas developments in Africa; make use of a combination of domestic private sector and public sector funding; as well as leverage African-tailored solutions such as the proposed African Energy Bank to speed up the development of infrastructure for gas exports.
“The need to speed up the installation of infrastructure that enables optimal energy exports has never been more vital than now, as more African producers seek to leverage current energy market trends to monetize their hydrocarbon resources.
At African Energy Week (AEW) 2022 in Cape Town – African energy leaders, leading producers will sign many deals especially on gas that are beneficial for investors and host communities as a result of trends in Europe and Asia and how best Africa can leverage the chance before we head off to COP27 in Egypt where discussions with international stakeholders will be held,” stated NJ Ayuk, the Executive Chairman, African Energy Chamber.
Despite its ability to become a global energy hub, a lack of investment to develop required infrastructure to boost energy exports remains the main barrier that continues to restrain Africa from unlocking the full benefits of its gas reserves for economic growth.
The African Energy Chamber’s annual exhibition and investment summit, AEW 2022, which will take place from 18 to 21 October 2022 in Cape Town, will provide a platform for discussions to be held on how Africa can attract the funding needed to build infrastructure that will enable the increased exportation of energy.
