Enhancing gas prospects in West Africa through urbanisation
With growing population and the prospects of an increase in demand for gas, West Africa gas potential appears on the rise.
Report indicate that gas-to-power will be the main anchor sector for the development of a domestic and regional gas economy in West Africa prior to such time as domestic gas resources can be unlocked to supplant LNG.
According to forecast by Wood Mackenzie, the fastest increasing trend in West Africa will be importing LNG to offset maturing domestic gas production and maintain supply. This has notably been the case for traditionally gas producers such as Cote D’Ivoire.
The second trend will be new gas producing countries turning to LNG to increase gas supply security whilst ramping up gas production. Included in this list of countries is Ghana
The final trend is the replacement of Heavy Fuel Oil (HFO) or diesel to meet peak power demand or as a backup solution. Senegal is expected to be the country where this opportunity will lie.
For countries lacking domestic gas today, importing LNG for gas-to-power projects has become feasible. Several large populous countries such as Nigeria, Ghana and Cote D’Ivoire are expected to increasingly depend on gas for power production.
Ghana, Cote D’Ivoire and Benin in 2016 were in varying stages of importing LNG primarily for domestic power generation.
Most of these countries are considering using Floating Storage and Regasification Units (FSRUs”) as the mode of import, which are more flexible, involve limited CAPEX incurrence compared to land based terminals and can become operational much faster than land-based terminals.
Several gas to-power projects are under development. In countries such as Ghana and Cote D’Ivoire, hydropower potential has reached its limits and with no viable coal options, natural gas is the next best option to meet generation needs.
In Cote D’Ivoire, Endeavor Energy has partnered with local company Starenergie2073 for the 375 MW LNG to power Songon Independent Power Producer (IPP). The IPP will be developed close to Abidjan.
Wood Mackenzie report on future trend in gas indicates that Cote D’Ivoire has domestic gas; however the production of domestic gas is declining, forcing Cote D’Ivoire to explore the FSRU option. Recent explorations on the coast of Cote D’Ivoire have shown that there is potential to develop more offshore reserves. However, this is not an immediate opportunity.
In Senegal, state owned utility Senelec has signed a preliminary deal with Japan’s Mitsui and Qatar’s Nebras Power to build an FSRU and 400 MW power stations. However, Senegal’s proposed LNG to power project is less advanced. Senegal’s objective is to boost the country’s growth through a steady power supply at a competitive cost (the country is presently largely dependent on HFO and diesel to fuel its power plants).
Ghana was the first country in Sub-Saharan Africa to turn to LNG to meet its gas shortage. Three FSRU projects are proposed along Ghana’s coast at two separate sites. Quantum Power and WAGL (Sahara/NNPC) have proposed separate developments at Tema (each involving Golar), whereas Endeavour Energy/GE are leading a development at Takoradi (also involving Shell and Excelerate Energy).
Similarly, in Benin, London listed Gasol which has signed a long term cross border agreement to supply 2.8 million cubic metres of gas per day to Ghana’s Volta River Authority from an FSRU, which it plans to install in Cotonou harbour in adjacent Benin.
KELECHI EWUZIE