Rethinking Africa’s Natural Gas: More Than a Temporary Solution

Historically, Africa's approach to natural gas has been marked by flaring or exporting as LNG, with minimal impact on local economic growth. Yet, recent shifts in global energy priorities, geopolitical developments, and a surge in investment towards clean energy are transforming the continent’s gas landscape. Although Africa’s 54 nations each have unique energy dynamics, several significant trends have emerged since 2020. 

As African energy stakeholders head to Accra for the West African Energy Summit on September from September 3rd to 5th, we summarise the key dynamics currently shaping up the sector.

Natural Gas: A Pragmatic Step Towards Clean Energy

For many African countries, natural gas is emerging as a critical transitional fuel, especially for those heavily reliant on coal or imported petroleum products like diesel and HFO for power generation. The continent is increasingly incorporating natural gas into broader decarbonization strategies, aiming to balance immediate energy demands with long-term environmental goals. This integration is leading to tangible projects among major thermal electricity producers in Africa.

South Africa, the largest coal producer on the continent, has introduced a draft Gas Master Plan that proposes developing between 2 GW and 16.6 GW of gas-to-power capacity in the near future. This plan includes converting existing coal-fired power plants to run on gas, with more ambitious projects involving new gas-to-power facilities. South Africa is also addressing the anticipated gas shortfall by advancing LNG import infrastructure, with a Vopak consortium selected to develop the Richards Bay LNG terminal. Additional LNG import options are being considered at Saldanha Bay and the Port of Ngqura.

Similarly, Morocco is strategizing to boost its gas usage. The Moroccan government is seeking a partner for the Nador West Med LNG import terminal, with construction potentially starting in 2026. In the meantime, independent operators like SDX Energy, Sound Energy and Chariot are exploring and developing both onshore and offshore gas fields to enhance domestic production.

Senegal, a nation heavily reliant on imported fuels for electricity, is also prioritizing natural gas. The expansion of its power sector includes new plants like the 120 MW Malicounda Power Plant and the 300 MW West African Energy Power Plant. However, these facilities will initially depend on imported fuels until solutions are found to utilize offshore gas fields operated by bp and Kosmos Energy.

Challenges and Future Prospects for Regional Gas Trade

Despite stated ambitions, regional gas trade in Africa is progressing slowly due to the high costs and extended timelines of pipeline construction. Currently, only the Mozambique-South Africa pipeline and the West African Gas Pipeline between Nigeria and Ghana are operational, though the latter is underused.

Future projects like the Nigeria-Morocco Gas Pipeline aim to link West Africa from Nigeria to Morocco, with planned landings in several other countries. This ambitious initiative has strong political backing from state-owned NNPC and Morocco’s ONHYM and could unlock significant development potential across the region. Similarly in East Africa, Tanzania aims to become a regional gas hub, potentially supplying Kenya, Uganda, and Zambia with much-needed energy.

Given the lengthy construction timelines for pipelines, interim solutions like gas trucking are being explored, with plans to transport gas from Ghana to Côte d'Ivoire and from Mozambique and South Africa to neighboring countries like Botswana, Zimbabwe, and Zambia.

The Rise of Small-Scale Gas Projects

Amidst growing push for economic diversification and industrialisation, natural gas is witnessing steady demand growth from a wide range of manufacturing businesses. In areas with existing gas infrastructure, such as Ghana or Nigeria’s Southwest and Southeast, private companies are extending gas distribution networks to industrial areas. For example, Genser Energy has established a private pipeline that serves Ghana’s gold mines and extends to Kumasi, where a new gas-to-power plant was recently inaugurated.

But in regions where public funding for major infrastructure is limited and gas demand is dispersed, it is small-scale gas projects that take the lead. These ventures often use "virtual" pipelines—gas transported by truck—rather than traditional, expensive pipelines.

As a result, small-scale CNG, LNG, and LPG projects are witnessing rapid expansion and are particularly visible in countries like Nigeria, Morocco, Tanzania, Gabon, and South Africa. In Nigeria, there is a notable increase in CNG and LNG projects to address unmet industrial demand, while Morocco's Sound Energy is building the Tendrara micro-LNG plant, and Egypt’s TAQA Arabia is growing CNG infrastructure in East and West Africa. In Gabon, Perenco has commissioned a new LPG terminal and is developing its first LNG plant, while Renergen recently started LNG deliveries in South Africa.

Charting the Path Forward

The progress in Africa’s natural gas sector is encouraging, yet challenges remain. Key factors like infrastructure development, policy frameworks, and investment climates will be crucial in shaping the future of the industry.

Successful projects will need to be sustainable, inclusive, and aligned with climate goals to attract investment. Robust regulatory frameworks will also be essential to ensure a stable environment for private sector participation.

As African nations increasingly view natural gas as a vital component of a sustainable energy future, the potential benefits are substantial. Expanding gas infrastructure can meet immediate energy needs and provide long-term economic and environmental advantages. By integrating natural gas into their energy mix, African countries can transition from traditional fossil fuels, support development goals, and enhance regional cooperation, paving the way for a more interconnected and resilient energy landscape.

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