Harnessing and Investing in Africa’s Natural Gas Market Expansion
Africa is well positioned to use its domestic gas resources to address energy poverty, stimulating socio-economic growth and industrialization in the process. However, regulatory reforms, massive investments and better regional cooperation are required to allow the continent to take advantage of its gas resources. These are some of the key points from a panel discussion exploring the opportunities and challenges within Africa’s gas market at the Namibian International Energy Conference taking place April 20-21 in Windhoek.
Speakers for the panel discussion, “Natural Gas Exploitation and Investment: Opportunities and Strategies,” included Dr. Klaus Endresen, General Manager, BW Kudu; Angie Helmi, Investment Director, Egypt Kuwait Holding; and Dr. Riverson Oppong, Business Operations Manager, Ghana National Gas Company. Representing Namibia, Ghana and Egypt, speakers provided information on their respective gas markets.
Highlighting the progress made in Namibia’s gas sector and what needs to be done locally and continentally to improve the market, Dr. Klaus Endresen made a strong case for natural gas in Namibia.
“For gas development to take place, the government has to play an important role. Gas is something new. Therefore, the government must be a champion, it must take an active position and show that gas must and can play an important role in the economy. It is also up to the government to get rid of misconceptions; gas is not a threat to renewable energies, but rather an enabler. The government must also have an international perspective. The Namibian market is limited, so it is only through international energy cooperation that we can achieve full economies of scale. The government should pay more attention to transmission capacity. Generating is not enough,” said Dr. Endresen.
Dr. Klaus Endresen’s recommendation comes at a time when Namibia seeks to maximize the exploitation and monetization of its 2.2 trillion cubic feet of natural gas reserves to address domestic energy problems while increasing energy exports. In this regard, the Namibian government is increasing exploration activities and infrastructure development, such as a pipeline that BW Kudu is developing to transport gas from the Kudu Gas Field to feed a 420 MW power plant to be established in Elizabeth Bay. .
Furthermore, while Africa has remained a climate champion, gas exploitation will allow the region to accelerate its energy transition by ensuring the decarbonisation of the transport and power generation segments, as well as ensuring clean cooking. Egypt is one of the leading African countries in terms of gas utilization for domestic consumption and economic growth.
“The industry depends on natural gas. Natural gas plays an important role in clean cooking. Half of Egyptian homes are connected to natural gas networks. The government is now switching to gas as a fuel source. Today we have around 800 CNG service stations and more than 450,000 vehicles that run on natural gas. We believe that developing natural gas has significant socio-economic benefits in terms of skills development and employment. The government has given gas a high priority,” Helmi said. Meanwhile, Africa still has 900 million people without access to clean cooking and 600 million people living in energy poverty, and gas is expected to play a key role in tackling this. On the power generation side, gas will enable African countries to diversify the energy mix and complement existing coal and hydroelectric generation to ensure energy security and affordability.
Highlighting the role that gas plays in ensuring sustainable power generation in Ghana, Oppong added that “energy sustainability is about availability. As it stands, Ghana produces more than 100% power on demand. We’re doing about 40% hydropower, 58% gas, and the rest is renewable. When we talk about energy transition, Ghana made the transition in terms of crude oil and coal some years ago. We have been using gas for a long time and that has to do with availability. Second, accessibility is key. We are covering about 85% of the demand in Ghana. Finally, the affordability and costs of electricity. However, we still have to do more.”
With natural gas representing a central theme at the upcoming African Energy Week (AEW) 2022 conference in Cape Town on October 18-21, the discussions presented during the Namibian International Energy Conference will be expanded, with speakers delving into the gas, energy poverty and development opportunities in Africa.
AEW 2022 is the annual conference, exhibition and networking event of the African Chamber of Energy. AEW 2022 unites African energy stakeholders with international investors and partners to drive the growth and development of the industry and promote Africa as the destination for energy investments. Key organizations like the African Organization of Petroleum Producers, as well as African heavyweights like Equatorial Guinea and Nigeria, have partnered with AEW, strengthening the role the event will play in Africa’s energy future.