As global players turn an eye to clean energy developments in the wake of the climate crisis, African resources represent the future. Notwithstanding the immense renewable energy resources available and the recent decision made by the European Union to label gas as green, Africa’s gas rich countries stand to benefit. The MSGBC region, in particular, is set to see accelerated investment and development, ushering in a new era of economic growth with gas as the key driver.
In pursuit of lower global carbon emissions, the European Commission proposed in January 2022 that natural gas investments should be regarded as similar to renewable energy. Under the new European Union (EU) proposal, and for emissions-reduction investment purposes, natural gas is to be regarded as “green” energy. This is on condition that the carbon emissions from natural gas remain under a fixed threshold and be utilized in a way that does not cause significant environmental harm.
The EU has emphasized that Europe will have to make large-scale investments in green energy in order to meet emissions-reduction targets. This represents one of the single largest growth opportunities in the world for the next twenty years and, given the large-scale gas reserve quantities in the MSGBC region, a significant opportunity for gas rich nations.
Already, before the EU’s decision to label gas as green, the MSGBC region – covering Mauritania, Senegal. Guinea-Bissau, The Gambia, and Guinea-Conakry – has made concerted efforts to develop and monetize regional resources. Within the Grande Tortue Ahmeyim (GTA) gas field, located in the offshore waters between Senegal and Mauritania, approximately 15 tcf of gas is set to be unlocked by the GTA liquefied natural gas (LNG) mega-project alone. In addition to increasing energy access and security across the region, these projects enable the export of gas to international markets – including Europe, which is currently experiencing an energy crisis.
With regards to climate change mitigation and the energy transition, natural gas represents the ideal resource. Many African countries have, therefore, placed gas at the forefront of national development, recognizing its role in meeting environmental targets regarding carbon reduction. This is evident in countries such as Senegal and Mauritania who have placed an emphasis on natural gas as an environmentally sustainable fuel source that can help both countries successfully navigate their own low-carbon transition objectives in the medium-term.
The exploitation of natural gas reserves could also mean increased socio-economic benefits for Africans. This is most relevant regarding the cost of electricity for both industry and consumers. Senegal, for instance, has some of the highest costs of electricity in West Africa, but that could change significantly from 2023 onwards as natural gas becomes available from the GTA project. The same can be said for Mauritania, as electricity costs are expected to drop as gas comes online.
In addition to lowering the electricity cost at the consumer level, industries such as power-generation, cement, transportation, and manufacturing will also reap benefit from lower electricity costs. Cheaper electricity for industry also means improved business and commercial growth. Projects such as the GTA are expected to assist sub-Saharan African countries increase their access to energy so as to fast-track industrialization and economic growth. There is undoubtedly potential for countries across sub-Saharan Africa to utilize natural gas as a catalyst for growth and dramatically lower the cost of production in a wide range of industries.
MSGBC Oil, Gas & POWER 2022
Under the patronage of H.E. Macky Sall, President of the Republic of Senegal, MSGBC Oil, Gas & Power will once again take place in Dakar, Senegal, with the event serving as a catalyst for investment and multi-sector development in 2022. To find out more visit msgbcoilgasandpower.com or contact firstname.lastname@example.org.