Africa’s Growing Gas Industry: Navigating Challenges in a Shifting Energy Landscape

Africa’s gas sector is experiencing unprecedented growth, with a robust pipeline of new projects taking shape across the continent. But as global energy dynamics evolve, the continent faces the challenge of staying competitive within an increasingly complex and volatile gas market. For Africa to continue attracting investment, it must ensure its energy projects offer both financial and environmental sustainability.

This was the key takeaway from discussions at the AOW: Investing in African Energy conference, a premier event that brings together industry leaders to shape the future of Africa’s energy landscape.

In recent years, gas development has seen significant acceleration, driven by both public and private sector efforts to bolster exploration and production. More importantly, gas is now being recognised as a crucial bridging fuel, helping the continent address its immediate energy demands while also meeting long-term decarbonisation goals.

“As we transition towards renewable energy, natural gas plays a pivotal role,” noted Mario Bello, head of the Sub-Saharan Africa Region at Eni. “It’s the cleanest of the fossil fuels and is essential for balancing both energy growth and environmental obligations.”

Eni is at the forefront of this effort, spearheading floating liquefied natural gas (FLNG) projects in Mozambique and the Republic of Congo. FLNG technology is seen as a game changer, unlocking stranded gas resources and shortening development timelines, all while enhancing domestic energy security and boosting export revenues.

Despite these advancements, securing financing for large-scale gas projects remains a significant challenge. Paul Eardley-Taylor, head of Oil & Gas at Standard Bank in Southern Africa, underscored the importance of developing bankable projects that mitigate concerns around sovereign risk. He also highlighted the transformative potential of both large LNG projects and smaller-scale ventures that could have a profound impact on local economies.

“Beyond energy, these projects have the potential to create jobs, drive economic growth, and improve energy access,” he explained. “Particularly in countries like South Africa and Namibia, smaller LNG and helium projects could provide invaluable benefits.”

Nina Birgitte Koch, senior vice president for Africa at Equinor, highlighted the need for competitive projects with strong environmental credentials to attract international investors. “CO2 reduction is no longer a secondary concern,” she emphasized. “It’s essential for securing funding.”

The panel also discussed the role of technology and collaboration in optimizing Africa’s gas potential. Gianluca Ciricugno, director of Enterprise Customer Solutions at Baker Hughes, stressed the importance of long-term planning and a collaborative approach between governments, investors, and technology providers. A stable regulatory environment is key to unlocking the full potential of the continent’s gas resources.

Dr. Tshepo Mokoka, group COO of South Africa’s Central Energy Fund (CEF), added that government intervention is vital in addressing market gaps and stimulating investment. CEF is already playing a pivotal role in advancing critical gas infrastructure, including the Romp pipeline and LNG import terminals.

Deri Irawan, Executive Director of Global LNG Marketing at ExxonMobil, concluded the discussion by emphasizing the need for a holistic approach to gas projects, which considers not only technical and economic factors but also the social and political landscape. “Bringing a commodity to market is just one part of the equation. Unlocking the full value chain requires strong partnerships and long-term planning.”

As Africa looks to solidify its place as a key player in the global gas market, the consensus from the panel was clear: The continent has the resources and the ambition to lead in the energy sector. However, this success depends on creating an attractive investment climate, fostering technological innovation, and ensuring regional cooperation to maximize the benefits of Africa’s gas resources for its people and the environment.

For further details, you can read the original article by Tania Griffin on African Mining News here.