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Mozambique to Benin: Total sees a booming African LNG market

By Christophe Le Bec
Posted on Wednesday, 14 October 2020 17:18

A general view of the world's first Liquefied Natural Gas (LNG) pipe rack suspension bridge in Punta Europa
A general view of the world's first Liquefied Natural Gas (LNG) pipe rack suspension bridge in Punta Europa February 5, 2014. REUTERS/Pascal Fletcher

Despite having become a major area for the production of liquefied natural gas, the continent still only consumes little of this “flexible and inexpensive” energy, according to the gas director of the French company.

Five years after his arrival as head of Total’s gas division, Laurent Vivier believes more than ever in the potential of the liquefied version of natural gas  (LNG) on the continent. On the production side, significant gas discoveries have been made in the last ten years in Mozambique, Egypt, Senegal, Mauritania and South Africa.

The continent will gradually become one of the major areas for the production of liquefied natural gas (LNG), exportable by shop, mainly to Europe and Asia.

READ MORE Egypt: Sisi saved by a gas boom

On the consumption side, however, according to the gas boss at Total, LNG, which is still little used on the continent, is also a flexible, inexpensive and less polluting energy alternative for African states and electricity companies.

Second largest LNG producer in the world

“Long-time gas-producing countries, like Egypt and Algeria, or new ones, such as Mozambique, have commissioned or are commissioning gas-fired power plants. It will be extremely easy for these countries to import LNG and re-gasify it to supply these same power plants in the event of a change in local electricity, gas demand, or change of season.

READ MORE Mozambique: Sophistication of Islamic insurgency threatens LNG plans

As for non-producing countries, which are seeking to reduce their carbon impact, diversify and lower their costs of energy supply, they will be able to take advantage of a fast-developing global LNG market that is competing with fuel oil and coal. “Prices have fallen sharply two years in a row. In 2019, it was at 50% with the expansion of supply in 2019, and 50% in 2020 because of COVID-19,” says Laurent Viver whose management was made part of Total’s new ‘Gas, Renewables and Electricity’ division.

READ MORE Natural gas: Africa could provide 20% of global needs by 2025

In 2018, with the acquisition of the gas asset activities of its partner Engie, the French group became the world’s second-largest LNG producer, with around 10% of the market, or 40 million tonnes per year that year (behind Shell, at 70 million tonnes), mainly thanks to its sites in Northern Europe and the Persian Gulf.

With the takeover of Anadarko’s Mozambique LNG mega-project at the end of 2019, the project – led by Patrick Pouyanné – had not produced much gas in Africa beforehand, is now a major player in this extractive sector of the continent. It also intends to develop a local business to sell its products.

Terminal projects from Benin to Mozambique

In 2017, The French oil company signed agreements with Côte d’Ivoire and Benin for the installation of LNG re-gasification terminals, with a view of linking them to gas power plants. While the project in Benin is continually making progress, Côte d’Ivoire’s appears to be at a standstill.

“Total has completed the technical course. All the Ivorian and Beninese governments have to do is give them the go-ahead and we can deliver a functional project to them in less than two years” states Viver. He highlights his group’s expertise in this type of installation, strengthened by that of the teams and re-gasification vessels (FSRU) acquired from Engie, which have carried out several similar projects, notably in Central America.

“We understand that the decision to import LNG is not to be taken lightly because it is politically sensitive and linked to questions of sovereignty, environmental protection and economic development,” acknowledges the boss of gas at Total. He also says that he is confident in the long-term adoption of this  “energy supply which is adaptable to requirements”.

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The last country interested is Mozambique. While the country’s mega gas deposits are located offshore in the far north of the country, the authorities are considering installing an imported LNG re-gasification terminal, 2000 km further south, in order to supply Maputo with electricity. They have just signed a co-operation agreement with the French company.

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