Africa continues to hold immense natural gas potential and is well positioned not only to increase its production, but also to capitalize on the underserved LNG market and meet the current demand from Europe.
Major gas development project in South Africa
The recently signed liquefied natural-gas (LNG) development project in the South Africa’s Mpumalanga Province is a promising step on the long journey towards a just energy transition in Africa. An exploitation program is being jointly developed by Kinetic Energy from Australia and the Industrial Corporation of South Africa (IDC), a national development finance institution.
This project builds on Kinetic Energy’s recent discovery of 3.1 billion cubic feet of natural gas in Amersfoort, Mpumalanga. The project is expected to generate 50 megawatts (MW) of equivalent power, with the potential to expand to 500 MW.
The project, described by Kinetic Energy as the largest onshore LNG project in South Africa, illustrates the potential of natural gas to develop the country’s economy and meet national energy needs. All of this is happening as South Africa strives to expand its oil and gas operations to reduce dependence on coal and pave the way for potential decarbonization.
Global and African natural gas production on the rise
As highlighted by the African Energy Chamber (AEC) in its recent report « The State of Energy in Africa by 2024 », natural-gas production is increasing both globally and in Africa. More promisingly, the report notes that « upstream operators are now reviewing their strategies and aligning their future investments more closely with the energy transition, with natural gas seen as a transitional fuel ».
The African Energy Chamber will support the Invest in African Energy conference in Paris organized by Energy Capital and Power. The African Energy Week will undoubtedly be a focal point for natural-gas investment in Africa.
Natural gas in Africa : A logical transitional fuel
For too long, the solution to the climate crisis has been oversimplified : decarbonization is not a goal that can be achieved overnight, nor without first building the necessary infrastructure to support the development of renewable energies.
Such a task is relatively easy for Western countries, which have spent centuries building their economy and infrastructure with fossil fuels. Logically, the same cannot be said for African states, which have long lacked these development opportunities and must now catch up at an accelerated pace.
Companies paving the way
Once again, it is encouraging to note that the AEC is not the only one recognizing that natural gas production makes sense for Africa. A growing number of energy companies are outlining policies that call for continuing energy transition measures for the future while providing the natural gas that powers today’s world.
The French major TotalEnergies is responsible for a significant part of the upstream activity on our continent. Following the discovery of two vast gas fields in South Africa in 2019 and 2020, TotalEnergies continues its exploration and production efforts there, despite efforts by environmentalists to block any future activity. TotalEnergies is also leading the Mozambique LNG project, considered one of the most important hydrocarbon developments in Africa.
Additionally, the German independent Wintershall Dea, which is increasing its stake by 4.5 % in the Reggane Nord natural gas project in Algeria. Wintershall Dea, with a strong presence in North Africa, has also announced the first gas production with its partners (Cheiron Energy, INA, and the Egyptian Gas Holding Company) on the East Damanhur block in the Nile Delta earlier this fall.
Africa’s enormous gas potential
Africa continues to hold an enormous potential in natural gas and is capable not only of increasing its production but also of capitalizing on it and meeting the current demand from Europe. Estimates showed an increase in Africa’s natural-gas production in 2023, from around 265 billion cubic meters to over 280 billion cubic meters by 2025.
Nigeria and Algeria are expected to focus more on LNG exports, with additional flows coming from Egypt, Equatorial Guinea, Mozambique, and the waters off Senegal and Mauritania. Africa’s natural-gas sector is poised to prepare the entire continent for potential decarbonization.
Currently, North Africa produces the majority of the continent’s production, although its production is expected to remain stable for the rest of the 2020s. An acceleration in production is anticipated during the second half of this decade. As new gas production ventures come online in the rest of the continent, this trend of increasing production is expected to become even more pronounced.
