Business a.m.
To succeed in the highly competitive international gas market, Africa must ensure that it provides a compelling value proposition to its stakeholders, according to experts in the energy sector.
The continent’s gas investment proposition, they argue, must be relevant, future-proof, and in line with both financial and environmental sustainability needs, if it is to continue attracting global capital.
In essence, Africa has been challenged to craft a gas investment offer that is not only financially attractive but also environmentally responsible and resilient, thereby demonstrating its long-term commitment to sustainable development and international competitiveness in the global gas market.
The panel discussion at the first day of AOW: Investing in African Energy, Africa’s premier oil, gas, and energy conference, reached a consensus on the importance of a value-driven, sustainable, and future-proof gas investment proposition for Africa.
The panelists agreed that for Africa to succeed in the global gas market and continue to attract international capital, its investment offer must be in alignment with the financial and environmental sustainability needs of stakeholders, thus ensuring a compelling and responsible investment proposition.
In recent years, the ambitions for gas development have intensified among both public and private sectors, driven by renewed exploration and production activities, as well as pragmatic energy transition plans.
This momentum is particularly strong today, as gas is increasingly seen as the optimal bridging fuel, facilitating the balance between Africa’s increasing energy demands and its commitment to decarbonisation.
Mario Bello, head of sub-Saharan Africa Region at Eni, stated: “Natural gas is at the centre of what we are doing in Africa. It’s the cleanest fossil fuel, producing fewer emissions than coal, so it plays an important role as we transition to renewables.”
According to Bello, Eni has been instrumental in enabling gas development on the continent through its innovative Floating Liquified Natural Gas (FLNG) projects in Mozambique and the Republic of Congo.
Bello highlighted the versatility of FLNG technology, noting its potential to unlock previously inaccessible offshore gas resources, accelerate project timelines, and make a meaningful contribution to domestic energy security and export revenue.
“Floating LNG is the key to unlocking the region’s gas potential, making it easier and faster to develop offshore resources,” he explained.
While Africa is striving to develop ambitious gas projects, securing financing for these ventures remains a formidable challenge. Paul Eardley-Taylor, head of Oil & Gas, Southern Africa, at Standard Bank, emphasized the importance of bankable projects that allay investor concerns, especially in relation to sovereign risk.
He pointed to the transformational potential of large-scale LNG projects as well as smaller, domestically focused gas ventures, asserting that these investments could boost the continent’s energy security and economic growth.
“The impact of these projects in African markets is incalculable,” Eardley-Taylor said, citing the potential for job creation, economic growth, and improved energy access. He further emphasised the importance of small-scale LNG and helium projects, particularly in markets like South Africa and Namibia.
Nina Birgitte Koch, Equinor’s senior vice president for Africa, emphasised the critical role of a stable investment climate in attracting international capital. Koch noted the significance of competitive projects that not only offer strong returns but also adhere to high environmental standards, particularly with regard to reducing carbon emissions.
“CO2 is the key criteria,” Koch said, adding, “It’s not just a ‘nice to have’ any more. I don’t think it’s possible to get capital to a big LNG project unless it’s highly competitive when it comes to CO2.”
The panel discussion also focused on the importance of technology and regional cooperation in maximising the value of Africa’s gas resources.
Gianluca Ciricugno, Africa director, enterprise customer solution at Baker Hughes, underscored the necessity for a long-term vision and collaboration between governments, investors, and technology providers.
“It requires a broader vision, probably government and all the people around the table, with a long-term approach… and not just four-year terms,” Ciricugno urged, highlighting the need for stable regulatory frameworks and a commitment to infrastructure development.
In agreement with the importance of government intervention, Tshepo Mokoka, group COO of South Africa’s Central Energy Fund (CEF), reiterated the need for state-led efforts to address market failures and unlock investment.
Mokoka highlighted CEF’s involvement in critical gas infrastructure projects, such as the Romp pipeline and LNG import terminals
“We need to solve the market failure,” Mokoka said, highlighting the need for government-backed gas offtake agreements and risk-sharing mechanisms to attract private capital.
Adding his voice to the panel, ExxonMobil’s Deri Irawan, executive director global, LNG marketing, underscored the necessity for a holistic approach to project development, one that considers not just technical and economic aspects but also social and political dynamics.
Irawan emphasised the need for strong partnerships and robust stakeholder engagement to ensure the longevity and success of gas projects.
This, he suggested, is vital in navigating the complex landscape of gas development in Africa and delivering value for all stakeholders, from investors to local communities.
“It is insufficient to just bring a commodity to the doorstep,” Irawan explained. “You also need to unlock that value chain,” he stated.
The overarching theme of the panel discussion was clear: Africa, with its abundant gas resources and ambitious vision, has the potential to emerge as a key player in the global gas market.
However, realising this vision requires a concerted effort to foster a stable and attractive investment climate, harnessing technological innovation, and nurturing regional cooperation.
