The conference’s theme, “The Future of Natural Gas: Growth Using Strategic Investment and Policymaking,” represents the extraordinary climate of the MSGBC gas rush and serves to drive policy design and international investment towards this opportunity.
Under H.E. President Sall’s landmark Plan for an Emerging Senegal, the west African country is targeting an 8% annual GDP growth rate for the next 20 years, creating 600,000 formal jobs and ensuring universal access to affordable electricity by 2025.
Last week, H.E. President Sall partnered with the Global Center on Adaptation to unlock a further $1 billion in climate finance under the Africa Adaptation Acceleration Program, noting that the continent currently receives less than 4% of global climate finance. Furthermore, in a decree earlier this year, the Senegalese government ruled that a minimum of 10% of all future industry revenues will be directed into FONSIS, the country’s Sovereign Wealth Fund, thereby re-investing $500 million into domestic markets by 2025 through gas, renewables and development projects. In spite of COVID-19, Senegal’s new gas plan and first adoption of local content legislation has seen foreign direct investment double in just five years.
It is this track record which draws the eye of multinationals, global markets and investors. Supermajor, bp and American oil company, Kosmos Energy have already partnered for the transnational Mauritania-Senegal Greater Tortue Ahmeyim project, unlocking 15 trillion cubic feet (tcf) of gas reserves with first production targeted next year, followed by 20 tcf of gas in Senegal’s Yakaar-Teranga field tentatively slated for 2024 and a further 13 tcf in Mauritania’s BirAllah field.
December 2021 saw American firm New Fortress Energy sign a Memorandum of Understanding with the Mauritanian government to deploy its fast LNG technology in the 1.2 tcf Banda field by 2024. Furthermore, the KARMOL partnership between Turkey’s Karpowership and Japan’s Mitsui OSK Lines has also birthed a second LNG floating storage and regasification unit, from which 15% of Senegal’s domestic power demand will be supplied.
In an official visit last week, Germany’s Chancellor Olaf Scholz affirmed the country’s intent to invest in Senegalese gas exploration and development, following up on an earlier visit from German President H.E. Frank Walter Steinmeier to Dakar wherein he commended his Senegalese counterpart, H.E. President Sall on the nation’s regional importance as a stable democracy. Discussions are also underway on an agreement mirrored off the just energy transition partnership inked between several countries such as Germany and the United States to support South Africa’s acceleration of a decarbonized economy.
Additionally, the Dutch Port of Rotterdam has partnered with the Chariot Energy Group for the construction of a specialist terminal for African green hydrogen exports at the world-class Maasvlakte port facility.
Meanwhile, Chariot’s 10 GW green hydrogen development, Project Nour, targets a 600,000 ton per annum output, and the London-listed company is looking to form a consortium of co-developers to greenlight the $3.5 billion development. The same is true of the Africa Fortesa Corporation for expansion eastwards onto Senegal’s Thiombane Dome, with one tcf of potential gas reserves, but this is just the tip of the iceberg.
While markets are key, both regional – as with Guinea’s $300 million LNG port project– and global – as with the European market being opened up due to tensions in eastern Europe -, ultimately, “African gas should develop Africa” in the words of Fortesa CEO and upcoming conference speaker, Rogers Beall. Despite its role as a regional energy leader, just 30% of the rural Senegalese population have access to electricity, and those fortunate enough to access the grid face high prices. With the cost of gas at $9 to heavy fuel oil’s $14, Senegal now stands to take a lead on the commodity while also boasting the added advantage of a lower carbon footprint.
The knock-on effects of tensions in eastern Europe have hit west Africa hard, driving up food and energy prices as highlighted by UN Secretary-General, H.E. António Guterres. H.E. President Sall is clear that “Our continent cannot be a field which is the feast of others,” and the MSGBC Oil, Gas & Power Conference in Dakar’s Centre international de Conférences Abdou Diouf on 1 to 2 September will not only advance investment and policy discourse in this regard, but will serve to expand west Africa’s energy future in gas and renewables together with low-carbon power sources.