No user image
Monica_55905 Jul 21

Gas for Growth: Is now the time to take advantage of Gas in West Africa?

Gas for Growth: Is now the time to take advantage of Gas in West Africa? image
Gas on the continent is at a precarious stage because of the abundance of discovered but as yet undeveloped resource, low oil prices, competitive growing renewable energy and an increasing
need for companies to consider how their future will meet zero-carbon expectations. 
The panel led by Moderator Raza Hasnani, Managing Director, Head of Infrastructure Investments at Africa50 will assess the significant role in regional development, so what’s the near to medium future of this versatile resource.

Alongside Raza we were privileged to be joined by Oscar Berniko, Director General In Charge Of State’s Petroleum Companies & Petroleum Assets at the Ministry of Mines & Hydrocarbons in Equatorial Guinea and Chris Levell, Managing Consultant at Gas Strategies, who has worked closely with Equatorial Guinea in the development of their gas masterplan. Further insight comes from Allan Fairbairn, Area General Manager at Aggreko and Kweku Awotwi, Former Executive Vice President at Tullow Oil & Chairman at the Volta River Authority, Ghana

Raza highlighted that Africa has a significant proportion of the world’s known gas reserves and prior to COVID-19, The International Energy Agency projected that Africa would become a major player in Natural Gas as a producer, consumer and exporter – so what is next?

Our panel dived right into the content assessing the main hurdles in West Africa increasing its exploration and production of Natural Gas. Oscar outlined that the majority of operators come to the region looking for oil rather than gas, explaining why it can be hard to close financing for the more complicated gas exploration. That being said, gas is becoming a fuel of choice over oil based fuels, creating an incentive to monetise new gas developments. Kweku agreed and added that the gas markets in West Africa are maturing now, seen through an increase in demand, creating significant opportunity. 

Chris Levell highlighted the important factors to bear in mind regarding the commercialisation of Gas, it is a market-led solution, whether it is an indigenous or export market, it needs to be in place with credible counterparts before reaching a final investment decision and developing the resource. This needs to be understood by all parties involved in utilising gas resources.

The private sector will of course play a role in gas exploration and developments, Allan and Kweku argued that perhaps the roles of, and the relations between public and private actors needs greater clarification to accelerate gas developments. The private sector needs to work with Governments to take advantages of countries gas resources when they do become available. 

Raza explained that in some cases countries in West Africa have natural gas reserves but are still relying on heavy fuel oil for power, and posed the question is there merit in this?  From a public sector perspective, Oscar stressed that the first role of a government has to be able to provide reliable power to its citizens regardless of where that energy comes from, however, agreed that there are better options. It is great to have natural resources in the ground but if there is not a framework or path to monetise these resources in a cost-effective manner, resulting in affordable energy then they could well remain unused.

Poll: Is now the time to take advantage of Gas in West Africa?

Yes                        76%
Unsure                  24%
No                           0%

As the conversation came to a close, our panellists agreed with the public poll results: it is the time to take advantage of Gas in West Africa. The takeaways highlight this: 
  • Yes, it is the time to take advantage, we see more and more development of commercial gas markets, pricing signals are there, demand is growing and the regulatory environment is being put in place, as well as the desire for more sustainable cleaner-burning fuels is apparent. 
  • Unless there is an enabling environment there is a significant risk the gas stays in the ground with the aim of universal access this would be a missed opportunity for the continent.  
  • An established, replicable roadmap, for both public and private operators, on how to best monetise natural gas resources is important for maximising the abundance of natural gas in West Africa.