GAS: Africa's big hope.


Sub-Saharan Africa accounts for just 1% of global natural gas production. Output reached 1.69 trillion cubic feet in 2011, but this is still a fairly low figure in comparison with the region's total reserves of 221 trillion cubic feet. This proportion could increase over the next few years as a result of the development of a new LNG plant in Mozambique, possibly another LNG facility in Tanzania and gas fired power plants in Nigeria.

There are only four gas exporters in the whole of sub-Saharan Africa: Nigeria and Equatorial Guinea were joined by Angola as LNG producers last year, while Mozambique exports gas to South Africa from its Temane and Pande fields in the south of the country.

Production on those two fields has been increased from 120M gigajoules a year to 18om gigajoules a year by South African firm Sasol. Most gas is piped to its Secunda synthetic fuel plant in South Africa but an increasing amount will be marketed domestically. Electricidade de Mocambique (EdM) hopes to develop a 1 GW gas-fired power plant to supply the entire Southern African Power Pool (SAPP) and reduce Mozambique's own dependence on the Cahora Bassa hydro scheme. Plans for the development of an LNG plant in northern Mozambique are discussed later.

Nigeria has by far the biggest proven gas reserves in the region at 184 trillion cu ft. The Nigeria LNG (NLNG) plant on Bonny Island has six trains with production capacity of 22M tonnes a year. NLNG has long hoped to develop a seventh train with capacity of 8.5m tonnes a year but upstream operators cannot sign the required long-term gas supply agreements until the repeatedly delayed Petroleum Investment Bill (PIB) is passed. Among other things, the PIB will set out the terms of investment for gas suppliers and royalty structures for both oil and gas production.

Other LNG projects that have the backing of large oil companies would add another 4om tonnes a year to national production capacity.

Progress on the proposed 4,300 km Trans-Sahara Gas Pipeline (TSGP) has also been glacially slow. Nigeria continues to flare about 25% of total production, despite government attempts to implement a ban from 2008 onwards. Producers are currently forced by regulated prices to sell gas to domestic Nigerian customers at below production cost. Nigeria also exports a small amount of natural gas via the West African Gas Pipeline.

Nigeria was the fourth-biggest LNG producer in the world in 2012, just behind Australia and Malaysia but...

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