Speaking during the second day of the MSGBC Oil, Gas & Power 2022 Conference, the International Energy Agency’s Africa Program Officer offered her insight into the future of Africa’s gas market
Day Two of the MSGBC Oil, Gas & Power 2022 Conference , held in Dakar on 2 September, featured a presentation by Rita Madeira, Africa Program Officer at the International Energy Agency (IEA), presenting her insight into the future of Africa’s natural gas market.
Setting out a’ Sustainable Africa Scenario’ and exploring the pathways for Africa’s energy system to evolve towards achieving African development goals, including universal access to modern and affordable energy services by 2030, Madeira shared data on global trends and projections on global gas markets from the IEA’s Africa Energy Outlook 2022 report.
“Despite renewable energies expected to amount for 80% of the continent’s added capacity by 2030, we understand that the industrialization of the African continent will also rely on extended natural gas use, with our scenario suggesting that natural gas demand is expected to increase exponentially,” Madeira stated.
African governments and the private sector will have to take decisions to develop or not develop these resources
Madeira highlighted Africa’s potential to offer modest contributions towards the growth of global gas demand, which will be primarily driven by the development of recent gas discoveries in Mauritania, Senegal, and Namibia.
It was noted that Africa’s production of natural gas is expected to grow to approximately 290 billion cubic meters by 2025, equating to an average growth rate per year of 2.7%.
Despite a recent surge in LNG exploration and production, however, liquefaction capacity is poised to slow significantly due primarily to deficient investment plans and protracted liquefaction infrastructure project development.
“African governments and the private sector will have to take decisions to develop or not develop these resources,” Madeira said, continuing by stating, however, that, “The most secure market for Africa is Africa. Where you have volatile international markets, which is a risk for projects that may take a long time for exploitation as the world brings down the natural gas demand, these projects will continue to find it extremely difficult to reimburse their initial costs.”
Highlighting the importance of private capital, Madeira indicated that the energy future of Africa, which will continue to depend heavily on natural gas, will require increased international mobilization.
Madeira concluded her presentation by pointing out that, in the wake of the global energy transition, the coming decade will not only be crucial for climate action, but will be crucial for Africa’s development, which will require the development of its natural gas to allow the continent the opportunity to industrialize further.
