Powering Africa: The Gas Option

Zamani Kempinski • Zanzibar • 17 to 19 November 2010

The Value of Gas

How valuable is gas for Africa's economic development? For years, sizeable quantities of sub-Saharan gas has gone up in flames, adding tonnes of carbon to the atmosphere and nothing to the fiscus. Gas discoveries have also remained dormant in the face of weak economics. But could this be about to change? Has the price users will pay for gas firmed to the point where flaring is just plain daft or is policy the deciding factor? Has Africa's demand for power reached the point of exponential escalation – in other words, just plain unstoppable? Quite simply, is there money in gas?

PAGO discussed the obstacles that have, in the main, delayed development of sub-Saharan gas projects and prevented the monetization of a valuable resource.

The policies and economics required by developers for the extraction of Africa's gas was examined with reference to projects across the continent. The emphasis was on the practical: What has worked? What has failed?

Prospects for African gas was examined with reference to the domestic and export markets. Gas for power generation must be considered a principal market. A gas-fired plant is quicker and costs less to build than a coal-fired station, and requires less staff to operate. Factor in the environmental benefits, and the advantage is palpable. But the industrial and petrochemical markets for gas cannot be ignored. Demand for bottled gas in Africa is also projected to soar.

Gas has been the pedestrian son of oil, but in some cases, all the better for it, with producers looking to domestic markets rather than being fixated with oil dollars. However, the export market is a factor for consideration, even if demand for African gas was less buoyant should the full potential of shale gas projects in the USA, China and Europe be realized.