Harnessing and Investing in Africa’s Natural Gas Market Expansion
Africa is well positioned to utilize its domestic gas resources to address energy poverty, spurring socioeconomic growth and industrialization in the process. However, regulatory reforms, massive investments and improved regional cooperation are required to enable the continent to harness its gas resources. These are some of the key takeaways from a panel discussion which explored the opportunities and challenges within Africa’s gas market at the Namibia International Energy Conference which runs from 20 – 21 April in Windhoek.
Speakers for the panel discussion, “Harnessing and Investing in Natural Gas: Opportunities and Strategies,” included Dr. Klaus Endresen, General Manager, BW Kudu; Angie Helmi, Chief Investment Officer, Egypt Kuwait Holding; and Dr. Riverson Oppong, Commercial Operations Manager, Ghana National Gas Company. Representing Namibia, Ghana and Egypt, the speakers provided insight into the respective gas markets.
Highlighting the progress made within 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. So, government must be a champion, they must take an active position and demonstrate that gas shall and can play a significant role in the economy. It is also up to government to shed misconceptions; gas is not a threat to renewable energy but an enabler. Government should also have international perspective. The Namibian market is limited so it is only through international energy cooperation that we can reach the full economics of scale. Government should pay more attention to transmission capacity. Generating is not enough,” stated Dr. Endresen.
The recommendation by Dr. Klaus Endresen come at a time Namibia seeks to maximize the exploitation and monetization of its 2.2 trillion cubic feet of natural gas reserves to address domestic energy woes while increasing energy exports. In this regard, the Namibian government is increasing exploration activities and the development of infrastructure such as a pipeline which BW Kudu is developing to transport gas from the Kudu Gas Field to power a 420 MW power plant to be established in Elizabeth Bay.
Additionally, while Africa has remained a climate champion, the exploitation of gas will enable the region to fast-forward its energy transition by ensuring the decarbonization of the transport and power generation segments in addition to ensuring clean cooking. Egypt is one of the leading African countries when it comes to utilizing gas for domestic consumption and economic growth.
“The industry is relying on natural gas. Natural gas has an important role regarding clean cooking. Half of Egyptian households are connected to natural gas networks. The government is now shifting to gas as a source of fuel. Today, we have around 800 CNG filling stations and more than 450,000 vehicles running on natural gas. We believe that developing natural gas has significant socioeconomic benefits in terms of capacity building and employment. The government has given gas significant priority,” stated Helmi.
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 addressing this. On the power generation side, gas will enable African countries to diversify the energy mix and to supplement existing coal and hydropower generation to ensure energy security and affordability.
Highlighting the role gas plays in ensuring sustainable energy generation in Ghana, Oppong added that “Energy sustainability has to do with availability. As it stands, Ghana produces over 100% power in accordance with the demand. We are doing around 40% hydro, 58% gas and the rest is renewable. When we talk about energy transition, Ghana transitioned in terms of crude oil and coal some years back. We have been using gas for some time now and that has to do with availability. Secondly, accessibility is key. We are covering around 85% of demand in Ghana. Lastly, affordability and costs of electricity. However, we still have to do more.”
With natural gas representing a central theme in the upcoming African Energy Week (AEW) 2022 conference in Cape Town on the 18-21 October, discussions introduced during the Namibia International Energy Conference will be expanded upon, with speakers elaborating on gas, energy poverty and opportunities for development in Africa.
AEW 2022 is the African Energy Chamber’s annual conference, exhibition and networking event. AEW 2022 unites African energy stakeholders with investors and international partners to drive industry growth and development and promote Africa as the destination for energy investments. Key organizations such as the African Petroleum Producers Organization, as well as African heavyweights including Equatorial Guinea and Nigeria, have partnered with AEW, strengthening the role the event will play in Africa’s energy future.
