Various speakers at the international roundtable on natural gas – hosted by the African Energy Chamber (AEC) (http://www.EnergyChamber.org) and Russian-based global energy giant Gazprom in Johannesburg – emphasized that natural does not represent a transitionary resource but rather the fuel of the future for Africa. During the important discussion, presentations were delivered by high-level representatives from Mozambique, South Africa and Nigeria, all of whom made a strong case for gas-directed investment and strengthened Africa-Russia cooperation.
Despite representing a relatively new gas market, two major discoveries in South Africa’s offshore basins in 2019 made clear the lucrative potential of the country’s gas industry. In order to accelerate the development of resources and the realization of national growth objectives, the government is working towards putting in place a Gas Masterplan.
“Our focus is on policy and planning,” stated Craig Morkel, Chairman, South Africa Oil and Gas Association, adding that, “The Masterplan exercise has started and the Department of Mineral Resources and Energy sees this integrated into the broader Integrated Resource Plan. It has also identified where demand will be located and how this can be serviced by Liquefied Natural Gas (LNG) as well as the gas-to-power demand. The Masterplan looks at both a bottom-up and top-down approach.”
Morkel added that, “We look forward to Gazprom participating in the country. We would like you to tell us, what would make South Africa more attractive to you, so that we can go to our government and advise. We look forward to working with Gazprom.”
Meanwhile, a number of countries across the continent have kicked off ambitious natural gas projects of their own aimed at monetizing resources, bolstering energy security and industrialization, while driving long-term socioeconomic growth. Mozambique, for instance, is leading several large-scale LNG developments. According to Michel Ussene, Executive Chairman, Mitra Energy, “Mozambique has already exported its first LNG cargo, representing a huge milestone for our country.”
However, with the quantities of gas located in the far north of the country, over 2,200km from the capital city Maputo, Ussene stated that “We need to look at what to do with this gas, and we need to think out of the box. There is no better example than Gazprom, as they are bringing gas into their economy. The most interesting thing we have heard today is that most of the gas is used in the country and not exported. This is a gamechanger to know that Gazprom is selling more in-country than outside. This way, we can increase access and create jobs.”
In West Africa, Nigeria has embarked on an ambitious gas agenda of its own, with projects being driven under the country’s ‘Decade of Gas’ initiative – a framework for amplifying investment and development across the entire gas value chain on the back of policy clarity. Despite offering significant resources, lack of investment has limited development in Nigeria. According to Dahiru Moyi, Advisor to the Minister of Federal Ministry of Finance, Budget and National Planning, “Africa does not have much funding, but we have resources. This is why it is important to come up with new approaches.”
Moyi stated that traditionally, Gazprom has not been able to operate in Nigeria due to lack of policy, a trend which has now been eliminated with the implementation of the Petroleum Industry Act (PIA) in 2021.
“Gazprom has the best intentions for Africa, and together, there can be some form of creative financing. We will welcome and be glad to see Gazprom come back to the negotiation table with Nigeria. Before, there was no gas policy in Nigeria or law. We have the PIA which is a clear path for how to operate in Nigeria,” Moyi added.
Stepping into this picture, Gazprom offers African countries the expertise, financing and technology needed to see large-scale projects into completion. While the continent has served as a strategic partner across various other sectors of the economy including agriculture, trade and commerce, new focus placed on bilateral energy relations is set to open up new opportunities for investment and development across Africa’s gas space.
Distributed by APO Group on behalf of African Energy Chamber.
