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Africa’s gas sector starts building momentum

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Offshore gas projects in Mozambique are set to gain momentum in 2024 with resumption of activities on the northern coast. WhyAfrica visited Mozambique recently. Image credit: Leon Louw for WhyAfrica

Africa’s gas sector starts building momentum

The recently signed liquefied natural gas (LNG) development project in South Africa’s Mpumalanga province is a promising step on the long road to Africa’s just energy transition.

By NJ Ayuk, Executive Chairman, African Energy Chamber

The project, being jointly developed by Kinetiko Energy of Australia and the Industrial Corporation of South Africa (IDC), a national development finance institution, will capitalise on Kinetiko Energy’s recent 3.1 billion cubic feet natural gas discovery in Amersfoort, Mpumalanga. The project is expected to produce 50 megawatts (MW) of equivalent energy and eventually expand to 500 MW.

The project, which Kinetiko Energy describes as South Africa’s largest onshore LNG project, exemplifies natural gas’ potential to grow the country’s economy and meet domestic energy needs.

This all comes about as South Africa works to expand its oil and gas operations in order to curb its reliance on coal and help pave the way to eventual decarbonisation.

South Africa is not alone, either. As the African Energy Chamber (AEC) covers in our recently released “The State of African Energy 2024 Outlook Report,” natural gas production is on the rise both globally and in Africa. Even more promising, our report notes that “upstream operators are now revising their strategies and aligning their future investments more in line with energy transition, and natural gas is being looked at as transition fuel.”

Companies leading the way (Africa’s gas sector starts building momentum)

French major TotalEnergies is responsible for much of the upstream activity in Africa. Following the discovery of two huge gas fields in South Africa in 2019 and 2020, TotalEnergies continues its exploration and production efforts in the country.

TotalEnergies also is driving the Mozambique LNG project, considered one of Africa’s most important hydrocarbon developments.

Then there’s German independent, Wintershall Dea, which is increasing its participation in the Reggane Nord natural gas project in Algeria by 4.5%.

The company is acquiring interest from Italian utility company Edison in the project. Wintershall Dea, which has a strong presence in North Africa, also announced first gas with its partners (Cheiron Energy, INA, and the Egyptian Gas Holding Company) at the East Damanhur block in the onshore Nile Delta earlier this fall.

Africa’s tremendous natural gas potential (Africa’s gas sector starts building momentum)

Our report finds that Africa continues to hold immense natural gas potential and is positioned to not only increase its outputs but also capitalise on the underserved LNG market and meet Europe’s ongoing demand. Our estimates show an increase from Africa’s 2023 natural gas output of about 265 billion cubic meters (bcm) to over 280 bcm by 2025.

North Africa currently drives the majority of the continent’s output, although its production is expected to remain flat throughout the rest of the 2020s.

Production ramp-up is expected through the second half of this decade as Mozambique increases its LNG output. As new-gas start-ups across the rest of the continent come online, this trend in increased output will become further pronounced.

Nigeria and Algeria, meanwhile, are expected to drive an increased focus on LNG exports, with additional flows coming from Egypt, Equatorial Guinea, Mozambique, and waters off Senegal- Mauritania.

Africa’s natural gas sector stands poised to prepare the entire continent for eventual decarbonisation, as do many of the companies operating here.

Download the AEC’s 2024 outlook report here (https://apo-opa.co/3QLEoHd).

Africa’s gas sector starts building momentum

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 Africa’s gas sector starts building momentum

 

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