Natural gas production in Africa is expected to grow by 10% by 2026, driven mainly by new projects in Nigeria, Senegal, Mauritania and Congo, an International Energy Agency (IEA) report says.
The IEA’s Medium-Term Gas Report 2023 forecasts Africa’s annual gas consumption to increase by an annual average of 3% during 2022-2026.
“The use of domestic natural gas production makes sense for African consumer countries, offering the considerable advantage of lower energy costs compared with fuel imports.
“Large-scale gas projects promise new opportunities for export revenues, although they are not evenly spread, since the distribution of resources shows regional inequalities,” the report says.
The IEA points out that despite holding over 9% of the world’s proven reserves and a vast potential for green energy, Africa remains the most energy-poor continent.
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Africa could be a key natural gas player
According to the IEA Africa Energy Outlook 2022, nearly 600 million people, or 43% of the total population, have no access to electricity.
The report says its significant natural gas reserves could turn Africa into a key player in the global gas market while improving energy access for its rapidly growing population.
“African countries produced around 6% of the world’s natural gas in 2022, a proportion that has doubled since 2000 and roughly tripled since 1990.
“The main producing countries are Algeria, Egypt and Nigeria, together accounting for over 80% of the continent’s production in 2022.”
In the medium term, up to 2026, the IEA forecasts 6% growth in Africa’s gas production.
The Agency says it is a rate that could have been higher without upstream concerns on legacy projects and had projects under development not experienced delays due to security and soaring costs.
The report says that gas demand in Africa is concentrated in the major producing countries – Egypt, Algeria and Nigeria – mainly to produce power for air conditioning.
Africa accounted for nearly 40% of new natural gas discoveries globally in the past decade, mainly in Mozambique, Mauritania, Senegal and Tanzania.
Challenges facing Africa’s natural gas potential
However, socio-political instability and security issues make Africa a high-risk environment for the gas industry.
“This results in a gap between the potential and the actual gas production projects under development.”
The report says the delays experienced by the Mozambique LNG project are a good illustration.
The project was originally scheduled to deliver its first LNG cargo in 2024, and with plans to produce up to 60 bcm/yr, the project now sees LNG production starting in 2028 at the earliest.
“Gas production in Africa has increased by an average of 2.5% per year between 2011 and 2021, above the world average of 2.2%. It reached 246 bcm in 2022, representing just over 6% of global production.
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“Africa has the potential to become a much more important source of global supply. Of the natural gas produced in 2022, 36% was exported, of which 61% was in the form of LNG.”
The main destinations are Europe (60% of total volumes exported in 2022, by pipeline and in the form of LNG) and Asia (less than 10% of total volumes exported in 2022, representing half of what was exported to Asia in 2021 in absolute terms).
North Africa remains the biggest contributor to gas production on the continent, with Algeria (101 bcm in 2022) and Egypt (67 bcm) among the top three gas-producing countries, along with Nigeria (40 bcm).
“In our medium-term outlook, we forecast gas production growth of 10% during the 2022 to 2026 period, taking into consideration gradually increasing production in Algeria and Nigeria, and production starting in Senegal, Mauritania, Congo and Gabon.
Natural gas consumption
“African gas consumption has almost tripled since 2000, and the main consumers are also the major producing or transit countries of North Africa plus Nigeria.
“In absolute terms, natural gas demand in Africa reached 172 bcm in 2022, comparable to the annual consumption of Central and South America and representing only 4% of global natural gas demand, or a tenth of the annual consumption of North America.
“Overall, we forecast annual gas consumption to increase by an annual average of 3% in Africa as a whole, over the period 2022-2026.
“New natural gas markets are emerging, mainly for power generation, as in Ghana, South Africa and Senegal, to meet growing electricity needs and replace liquid fuels.
“These new markets are supported by the development of production as well as the commissioning of new import infrastructure.”
See the IEA’s Medium-Term Gas Report 2023.
