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US investors hone in on LNG in Africa

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American companies are honing in on Africa’s growing Liquefied Natural Gas (LNG) market. Image credit: Wikimedia
US investors hone in on LNG in Africa. Image credit: Wikimedia

US investors hone in on LNG in Africa   

American companies are honing in on Africa’s growing Liquefied Natural Gas (LNG) market.

As Africa looks to develop its gas for domestic and export markets, the U.S. is honing in on LNG as a critical investment avenue, alongside traditional oil exploration.

In October 2023, energy research and consultancy group Wood Mackenzie stated that Africa’s USD800-billion, 20-year upstream capital expenditure program would result in world-class LNG projects in Mozambique and floating LNG (FLNG) in five countries, presenting substantial gas-driven opportunities for U.S. investors, operators, project developers and service providers.

“While American companies are already at the helm of the continent’s booming LNG industry, there is room to grow their participation, particularly in FLNG, which offers increased flexibility, reduced time to market and suitability for smaller gas volumes,” the report states.

Africa dominates short-term investments   

According to energy intelligence provider Westwood Global Energy, the global FLNG market is set to see USD35-billion in new investment by 2027 (totalling 18.3 million tons per annum (mtpa) of additional capacity) with Africa dominating short-term investments.

This increase in capacity will generate an associated engineering, procurement, and construction (EPC) contract value of USD13-billion.

After 2027, an additional 36.5 mtpa of capacity is expected to come onstream, with an EPC value of USD22-billion.

American companies lead the way

In Equatorial Guinea, U.S. operators and contractors are leading the country’s flagship Gas Mega Hub (GMH), which seeks to monetise all stranded gas fields in the Gulf of Guinea to facilitate an intra-African LNG trade.

After achieving first gas from the project’s initial phase, Chevron’s Noble Energy signed a Heads of Agreement with Houston-based Marathon Oil and the government of Equatorial Guinea March 2023 to develop phases two and three.

The GMH could also pave the way for the construction of West Africa’s first LNG storage and regasification plant – the Akonikien LNG Terminal – proposed in 2019 and to be built by American manufacturer Corban Energy Group.

Mozambique a strategic market

Mozambique is another strategic market for US gas investments, having passed USD1-billion in LNG exports last November. American multinational ExxonMobil is currently leading development of the USD23-billion Rovuma LNG project and anticipates a final investment decision in 2025, utilising a retooled, phased construction approach.

With a planned capacity of 18 million tons per year, the facility will deliver reliable, affordable energy to local customers, as well as export to global markets.

In neighbouring South Africa, ExxonMobil is studying the commercial and technical feasibility of an LNG regasification terminal to bring low-cost, reliable fuel to the country.

Such projects can enable US participation in boosting Africa’s gas transport, storage and regasification capabilities, as well as erecting power stations and associated infrastructure.

More development on the horizon

With further world-class LNG developments like bp’s Greater Tortue Ahmeyim LNG in Senegal and Mauritania, Perenco’s Cap Lopez LNG Terminal in Gabon, Eni’s Congo LNG in the Republic of Congo, and UTM Offshore’s first indigenous FLNG in Nigeria on the horizon the US is cementing in its market leadership in Africa’s on- and offshore gas industry.

In the Just Energy Transition, LNG is set to play a substantial role in the African – and global – energy mix for the foreseeable future.

The upcoming Invest in African Energy (IAE) forum (https://apo-opa.co/4bITmY3) – taking place in Paris on May 14-15 – will showcase trade, partnership and investment opportunities available to U.S. companies across Africa’s energy supply chain.

The event brings together projects from all four corners of the continent to the global investment stage, with a view to establishing regional African gas markets and capitalizing on rising U.S. interest in African energy. 

Organised by Energy Capital & Power, IAE 2024 (https://apo-opa.co/4bITmY3is an exclusive forum designed to facilitate investment between African energy markets and global investors.

US investors hone in on LNG in Africa

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US investors hone in on LNG in Africa

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