Can the new Nairobi International Finance Centre (NIFC) compete with Johannesburg and Dubai to help finance trade and industry in East Africa ... and beyond? Acting CEO Oscar Njuguna believes that there is plenty of room for everyone.
In its latest report on Africa’s energy outlook for 2020, the African Energy Chamber, an inter-professional grouping of energy and mining companies in Africa, focuses in particular on the export potential of African natural gas, whose exports in liquefied form will increase significantly.
The gigantic discoveries made over the past decade in Mozambique, Tanzania, Senegal and Mauritania have revealed a total of 200 trillion cubic feet (Tcf) of gas reserves, enough to supply two-thirds of current world demand for 20 years. In addition, there are 200Tcf of proven reserves in Nigeria.
- In 2018 sub-Saharan Africa provided 10% of the global production of liquefied natural gas (LNG), equivalent to 28 million tonnes per year (mtpy).
- Analyst Akap Energy forecasts that by 2025 this African production capacity will have increased by 150% to reach 84 mtpy.
- That is 15 to 20% of the world market.
Such growth will depend on investment of more than $75bn, two-thirds of which will be injected into Mozambique.
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This prospect is made possible by the fact that, after a decade in which there was a shortage of major investment projects, African gas is attracting new interest from international majors such as Total, ExxonMobil and Shell.
- The main investments are concentrated on the east coast of the continent, due to the proximity of production areas to major Asian import markets, despite the high costs involved.
Floating liquefaction plants
The $50bn to be committed to Mozambican LNG between 2017 and 2025 by Exxon and Anadarko (currently being acquired by Total) is proof of this.
These LNG projects are also rapidly mobilising significant financing, such as the Senegalese-Mauritanian offshore gas field project at Grand Tortue, discovered in 2015, which could come on stream in 2020, the report says (but in 2022 according to our information) thanks to a $10bn investment from BP and Kosmos Energy.
Finally, while investments are less significant, countries with insufficient reserves to install onshore power plants, such as Cameroon, Ethiopia and Equatorial Guinea, are committing to the use of floating liquefaction plants, with production start-ups announced as early as 2020.
Once again, leading majors are ready to invest.
This article first appeared in Jeune Afrique.
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