The Journal of African Business Issue 7

intent of investing $8-billion in a gas project that could export its output via the
Greenstream pipeline. Eni has also added a number of gas-producing assets in
Algeria, which has pipeline connections to both Italy and Spain, to its portfolio over
the last year. However, some IOCs and EU states have focused on LNG-oriented
endeavours that are in line with the growing flexibility of the global gas market.
Italy is certainly set to benefit from Eni’s efforts on this front; over the last year, the
company has arranged to import more LNG from two existing suppliers, Algeria
and Angola, while also launching LNG exports from the Coral field offshore
Mozambique and striking a deal with the Republic of Congo on its floating LNG
(FLNG) project for the Marine XII fields. Eni is hardly alone. For example, the
British giant BP said earlier this year that it anticipated making a final investment
decision on the Yakaar-Teranga LNG project, which focuses on a group of fields
off the coast of Senegal, before the end of 2023.
Meanwhile, Shell (UK) and Equinor (Norway) revealed in mid-May that
they had finished negotiations on the $42-billion Tanzania LNG project
and expected to sign a host-government agreement and production-sharing
agreement soon.And there are plenty of other examples. Altogether, there
have been enough new investment pledges made that Africa is now on track
to see its total LNG export capacity rise from the current level of 80-million
tons per year to around 110-million tons per year by 2030 and to more than
175-million tons per year by 2040.
NJ Ayuk, Executive Chairman,
African Energy Chamber
AFRICA’S SLOWLY EXPANDING
CAST OF LNG PLAYERS
But as the AEC explains in “The State of
African Energy Q1 2023 Report”, these
commitments are not going to change the
picture for African LNG immediately. For
the time being, the continent’s LNG business
will continue to be dominated by the most
established players: Egypt, Algeria and
Nigeria, and to a lesser extent, Equatorial
Guinea and Angola. Algeria and Egypt,
our report notes, likely will maintain their
Credit: APO Group
existing LNG infrastructure capacity of about
29-million tons per year and 12.7-million tons
per year respectively. Nigeria, meanwhile, will increase its LNG infrastructure
capacity from 22-million tons per annum (MMtpa) to 30 MMtpa when it
completes the Nigeria LNG (NLNG) Train 7 development, our report states.
The project by Nigeria LNG, a venture comprising the Nigerian National
Petroleum Corporation, Shell, TotalEnergies and Eni, calls for the construction of
an additional LNG train and a liquefaction unit for Nigeria’s six-train Bonny plant.
Train 7, which was about 32% complete in late 2022, is intended to meet local
needs while increasing Nigerian LNG exports, diversifying Nigeria’s revenue
portfolio and helping the country better capitalise on its 200 tcf of natural
gas reserves. Nigerian maritime logistics company UTM Offshore, meanwhile,
likely will nudge up Nigeria’s capacity to just over 31 MMtpa when it completes
the FLNG project mentioned above. As of last November, the FLNG was
expected to start operating in 2027.
BP is due to begin first-phase production at Grand Tortue/Ahmeyim block
in late 2023, and Eni and its partners are set to expand LNG production at the
Coral field offshore Mozambique. Indeed, the AEC expects these projects to
help push African LNG exports up to the equivalent of 66-billion cubic metres
this year, up 5% on 2022.
However, it’s going to take time to bring the rest of the new projects on
stream and to build all these new onshore and offshore LNG plants. Tanzania
LNG, for example, is not expected to begin production until 2028 and Eni’s
Marine XII project will not reach its full capacity of three-million tons per
year until late 2025.
TotalEnergies of France is not likely to begin commercial operations on the
Mozambique LNG project before 2025 and the US giant ExxonMobil will need
even more time to launch its Rovuma LNG project in Mozambique, since it has
yet to reach the final investment decision stage.
This means that Algeria, Egypt and Nigeria will continue to account for
the majority of the LNG coming out of Africa for the next few years and that
the balance won’t really start to shift until the end of the decade. IOCs and
EU states are currently laying the groundwork for expanding production and
opening up new basins to support LNG projects, but it will take a few years for
their efforts to pay off.
For more insights on LNG projects and other developments in the African gas
sector, read our “The State of African Energy Q1 2023 Report.” It is available for
download at www.EnergyChamber.org.
Distributed by APO Group.
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