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Gas Industry West Africa

The Gas Industry in West Africa 2020

Louise Mitchell | Benin; Burkina Faso; Cape Verde; Gambia; Ghana; Guinea; Guinea-Bissau; Ivory Coast; Liberia; Mali; Mauritania; Niger; Nigeria; Saint Helena; Senegal; Sierra Leone; Togo | 01 October 2020

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Report Coverage

This report on the gas industry in West Africa focuses on the downstream activities of preparation, processing and production of gases in gasworks, and the production of gas by the carbonation of coal or by mixing manufactured gas with natural gas or petroleum or other gases and distribution via tankers and/or pipelines and gas cylinders. It includes comprehensive information on the state and size of the sector in various countries, developments and corporate actions and influencing factors. There are profiles of 10 companies operating in the region including the major multinational players such as Royal Dutch Shell, Total and Exxon Mobil, and local players such as the Nigerian National Petroleum Corporation and the Ghana National Petroleum Corporation.

Introduction

Nigeria is the leading gas producer in West Africa. With proved natural gas resources of 193.35 trillion cubic feet (tcf) Nigeria has 99% of total proved resources in West Africa. The biggest recent find of natural gas in the region was on the maritime border of Senegal and Mauritania where the total recoverable gas resources are estimated to be around 15tcf. The combined production capacity of liquefied natural gas (LNG) plants in West Africa in 2018 was 24.4 million tons per annum (Mtpa), of which 21.9Mtpa was in Nigeria. The sector is dominated by international oil companies that include Royal Dutch Shell (Shell), Total from France, BP from the UK, and Oryx Energies from Switzerland. The companies are involved in upstream and downstream activities.

Strengths

• Development of new liquefied natural gas projects.
• Recent discovery of new resources in Senegal/Mauritania.
• The environmental and economic benefits of natural gas make it a viable alternative to other fossil fuels, particularly coal.

Weaknesses

• High barriers to entry limit competition.
• LNG production does not primarily benefit local economies as most of the LNG is exported.
• New gas finds are unlikely to be utilised in domestic markets and benefit local economies.
• The oil and gas sector is a high risk, capital intensive industry. Exploration and development costs are prohibitive and players are highly exposed to the volatility of commodity prices and exchange rate fluctuations.
• The region’s limited gas transmission infrastructure continues to constrain the development of the domestic natural gas market.

Opportunities

• Development of LNG-fuelled vehicles and vessels.
• Importation of LPG and LNG.
• Offshore gas exploration.
• The development of alternative sources of clean energy such as biogas.

Threats

• Economic pressures could impact adversely on industrial consumption and on the availability of exploration funding.
• Rising input costs.
• The coronavirus pandemic threatens the completion of projects and adversely affects regional and global economies.
• The drop of the crude oil price would have a negative impact on exploration and development activities.
• The escalation of geopolitical tensions, which could threaten global gas supplies.
• The increased competitiveness of other forms of energy such as renewables.

Outlook

Major natural gas discoveries in recent years in Senegal and Mauritania in West Africa, and in South Africa and Mozambique, could support Africa’s push for industrial growth and its need for reliable electricity supply, while reducing pollution from coal. The price of gas, the development of distribution networks for liquefied natural gas, and the financing available for infrastructure will be some of the factors to determine the success of gas-to-power efforts. The International Energy Agency expects Africa to become a major player in natural gas as a producer, consumer and exporter and a major supplier of LNG to global markets. Africa’s high demand for energy is expected to create positive effects in the African downstream oil industry. Gas production is projected to increase by 2% over the next two to five years, and liquefied natural gas production by 1%.

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The Gas Industry in West Africa
The Gas Industry in West Africa 2020

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Industry Landscape

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Table of Contents

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PAGE
1. INTRODUCTION 1
2. REGION INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 2
3.1. Industry Value Chain 3
3.2. Geographic Position 6
4. SIZE OF THE INDUSTRY 10
5. STATE OF THE INDUSTRY 12
5.1. Region 12
5.1.1. Trade 15
5.1.2. Corporate Actions 16
5.1.3. Regulations 17
5.2. Continental 19
5.3. International 23
6. INFLUENCING FACTORS 24
6.1. Economic Environment 24
6.2. Input Costs 25
6.3. Technology, Research and Development (R&D) and Innovation 25
6.4. Labour 26
6.5. Gas for Electricity Generation 27
6.6. Environmental Concerns 29
7. COMPETITION 30
7.1. Barriers to Entry 31
8. SWOT ANALYSIS 31
9. OUTLOOK 32
10. INDUSTRY ASSOCIATIONS 33
11. REFERENCES 33
11.1. Publications 33
11.2. Websites 34
APPENDIX 1 35
Summary of Notable players 35
COMPANY PROFILES 42
CAIRN ENERGY PLC 42
DANGOTE INDUSTRIES LTD 45
ENI SPA 47
EXXON MOBIL CORPORATION 56
GHANA NATIONAL PETROLEUM CORPORATION 65
KOSMOS ENERGY LTD 69
NIGERIAN NATIONAL PETROLEUM CORPORATION 74
ROYAL DUTCH SHELL PLC 77
TOTAL S.A. 84
TRAFIGURA GROUP PTE LTD 87