The big future for African gas lies in the East of Africa
The
report spotlights Africa’s rapidly evolving natural gas sector, and
while Algeria, Nigeria, Egypt and Libya are identified as holding
significant reserves, the production of gas is considerably lower in
these countries. More recently, the sector’s growth has been
concentrated in West Africa, with the huge associated gas resources that
accompanied the deepwater oil boom, led by Nigeria and Angola. While
the West African gas growth will continue as flaring is reduced and
local gas infrastructure is developed, the big future for African gas
lies in the East of Africa with the massive offshore gas discoveries in
East Africa, particularly in Mozambique and Tanzania.
Pungong
comments: “While the risk rankings overall in Africa are quite high,
for many countries the “risk trend” is improving, Most importantly
though, the opportunities for Africa in this sector are enormous and the
challenges and risks can be addressed and mitigated.”
Africa’s
gas reserves will be more than just headline opportunities for the
national oil companies (NOCs), the deep-pocketed oil and gas majors,
their big international exploration and production (E&P)
counterparts as well as well-known African oil and gas specialists.
Opportunities for local supplies abound
The
ramp-up in E&P activity brings opportunity for the oilfield
services (OFS) segment, but again, not just for the big international
OFS players, but also for local and regional companies that can
contribute to the supply chains and to the associated upstream support
infrastructure. The broader infrastructure build-out could also include
massive export facilities, as in the case of liquefied natural gas
(LNG), but also smaller projects such as pipelines and gas distribution
networks to support local/regional domestic gas demand.
The
associated development or expansion of a domestic gas demand sector
could also bring substantial commercial opportunities in the power
generation, industrial and even transportation sectors. Indeed, many of
the gas flaring reduction efforts are tied to domestic gas use projects.
Pungong
concludes, “African governments and regional NGOs will of course have
critical roles to play – first and foremost, developing a meaningful and
practical master gas development plan, one that addresses the upstream
tax and licensing models, as well as the necessary infrastructure issues
and investments, and local training and job creation issues.
Collaboration and partnerships with the IOCs, both big and small, will
likewise be critical.”
Distributed by African Press Organization on behalf of Ernst & Young.
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