By Suly Manope, Southern Africa correspondent, in Windhoek
The Tanzanian government is planning a national meeting with investors, banks, and regulators to address financial barriers hindering the construction of compressed natural gas (CNG) fueling stations.
James Mataragio, the country’s Deputy Minister of Energy, says the goal is to make CNG more accessible as a cheaper alternative to gasoline.
The first integrated natural gas filling station and conversion centre in the south east African country was unveiled in December 2023 by Doto Mashaka Biteko, Deputy Prime Minister and Minister of Energy, in Dar es Salaam. Branded “Master Gas”, the station, first of 12 stations to be developed by TAQA Dalbit (a Joint Venture between TAQA Arabia and JCG Oil & Gas), was meant to serve up to 800 vehicles daily. The company claimed it was pumping $10Million worth of investment into those filling stations.
BQ Construction, another CNG investor, says it would open a station for 180 vehicles per day, while Puma Energy promises to launch four CNG stations between now and the end of December 2025.
Mataragio, the deputy energy minister, says the government wants to reassure investors that CNG is a viable sector and its costs are manageable with sufficient funding. As local banks become more open to financing the CNG sector, he argues, private investment will ramp up.
Tanzania holds 57Trillion standard cubic feet (57Tcf) of natural gas, 86% of which is located in deepwater, underdeveloped and proposed for LNG export.
But 14% of the reserves, which is 8Tcf, is located onshore, with some of it developed in Songo Songo field, operated by Orca Energy, Mnazi Bay project, operated by Maurel et Prom (M&P) and Kilwani North, operated by Aminex. These three accumulations deliver over 180Million standard cubic feet per day to the domestic economy, mainly power plants, a cement plant (Dangote) and industries.
TAQA Dalbit sources its CNG from Orca Energy, who reports that it signed a Gas Sale Agreement with the former in late 2022.
Tanzania reckons that fuel prices for transportation could drop significantly if it pushes CNG uptake. The government also sees the CNG adoption in the context of the energy transition.
Italian explorer ENI has re-announced the end of 2025 as start-up date for its 2.4Million Metric Tonne Per Annum (MMTPA) Nguya floating liquefied natural gas (FLNG) unit, offshore the Republic of Congo.
ENI reiterated the scheduled date in the same press release announcing the sail away ceremony for the vessel in Shanghai, China.
The company says that work on the subsea infrastructure required to launch the project that will deliver the liquefied gas from the nominated reservoirs is progressing on schedule, “enabling mooring and startup by the end of 2025”.
The Nguya unit, 376 metres long and 60 metres wide, will be moored at a depth of 35 metres and used for liquefied natural gas production. “Conceived, designed, and built in only 33 months – from contract award to sail away – the FLNG sets a record for time-to-market in the entire sector. Moreover, its cutting-edge technical features allow it to process gas from multiple fields, making it suitable for the development of future fields as well”, ENI declares in the release.
The company explains that the floating production and compression unit – formerly the Scarabeo 5 drilling rig – has been refurbished and will depart by the end of the week of August 25, 2025. It will be used to send processed gas to the Nguya unit. “Through an innovative transformation, ENI was able to meet execution timelines, reduce costs, and minimize environmental impact”, the company says.
Tango FLNG (0.6 MMTPA) began production in December 2023 and has already exported 12 cargoes. It will be joined by the Nguya FLNG (2.4 MMTPA) by the end of the year, bringing the total capacity of the Congo LNG project to 3 MMTPA.
The so called breaking news, that NNPC Ltd, the Nigerian state hydrocarbon company, had inaugurated the long awaited Obiafu-Obrikom-Oben (OB3) gas pipeline, is fake and exaggerated.
The headline itself, in its several variations on social media, is misleading. It says that NNPC launches 113kilometre section of OB3 gas pipeline project. The truth is that OB3 is all of 130kilometres.
It is the fourth fifth and sixth paragraphs that reveal the falseness of the narrative. The paragraphs quote the latest NNPC ‘Monthly Report Summary’ for July 2025, as saying that the pipeline is currently transporting around 300Million standard cubic feet per day (MMscf/d)from several gas producers, including Ashtavinayak Hydrocarbon Ltd (250MMscf/d) and Platform, Chorus, and Xenergi Group (50MMscf/d). It uses that to conclude that the OB3 is completed.
In fairness to NNPC, the ‘Monthly Report Summary’ for July 2025 actually says this much about OB3: That it “commenced implementation of revised execution strategy towards expedited completion of OB3 River Niger Crossing”. That simply means that the river crossing issue, which has held up the completion of the pipeline for over seven years, was still not done as of July 31, 2025.
Now, we understand that this is where the original interpreter of/purveyor of the message from the NNPC Monthly Report got it wrong. Just by saying, that “113kilometre portion of OB3 Gas Pipeline has been commissioned and flowing about 300MMscf/d of gas“ , doesn’t mean that the OB3 is completed.
The several fields from which the four listed companies are injecting from are all located in the western and central Niger Delta where the OB3 has been operational since 2020.
The part of OB3 that has remained uncompleted and for which the date of completion is still not certain, is the eastern segment.
So, here is the true story.
The OB3 is a 130kilometre pipeline whose construction was contracted in 2012 to two companies; Messrs Nestoil Limited (Lot A) in the east and Oilserv Limited (Lot B) in the west. By 2019, Oilserv had completed the western leg of the line, while Nestoil was stuck and had begun to lament the inability of crossing the river under the riverbed between Ndoni in Rivers State and Aboh in Delta State. The project started to struggle due to the failure of various technologies to achieve this underwater crossing.
The segment in the west as well as part of the east (80% of the line) has been operational for close to five years now. Since Nestoil was taken off the job, the 2.8Kilometre long River Niger Crossing (RNC) to link the West and East has defied the effort of several contractors, including China Petroleum Pipeline Construction Company.
A Crucial Evacuation Facility
The major gas monetisation projects in the eastern Niger Delta, especially those meant for the domestic market, including the $800Million ANOH Gas Processing Company (AGPC)’s ANOH (300MMscf/d), Renaissance’s 300MMscf/d), cannot produce into the network until the OB3 RNC project is completed. What’s more: the western terminus of the OB3 is Oben, from where more gas (than currently delivered) will be pumped into the Oben –Ajaokuta line, which is the starting point of the Ajaokuta-Kaduna-Kano (AKK) gas line. So without optimum supply from OB3, the AKK will not be well supplied.
The NNPC report made it clear that this project is not yet a done deal. It says it has “commenced implementation of revised execution strategy towards expedited completion of OB3 River Niger Crossing”. This is the last official statement.
Global gas flaring surged for a second year in a row, wasting about $63Billion in lost energy and setting back efforts to manage emissions and boost energy security and access, the World Bank has noted in a new report.
Flaring, the practice of burning natural gas during oil extraction, reached 5.3Trillion cubic feet (TcF) in 2024, up by 106Billion cubic feet from the previous year and the highest level in almost two decades. An estimated 389Million tonnes of CO₂ equivalent—46Million of that from unburnt methane, one of the most potent greenhouse gases—was needlessly emitted.
While some countries have reduced flaring, the top nine largest-flaring countries continue to account for three-quarters of all flaring, but less than half of global oil production. Satellite data compiled and analyzed in the World Bank’s annual Global Gas Flaring Tracker shows that flaring intensity—the amount of gas flared per barrel of oil produced—has remained stubbornly high for the last 15 years.
“When more than a billion people still don’t have access to reliable energy and numerous countries are seeking more sources of energy to meet higher demand, it’s very frustrating to see this natural resource wasted,” said Demetrios Papathanasiou, World Bank Global Director for Energy and Extractives.
The report highlights that countries committed to the Zero Routine Flaring by 2030 (ZRF) initiative have performed significantly better than countries that have not made the commitment. Since 2012, countries that endorsed ZRF achieved an average 12% reduction in flaring intensity, whereas those that did not saw a 25% increase.
To accelerate progress, the World Bank’s Global Flaring and Methane Reduction (GFMR) Partnership is supporting methane and flaring reduction projects through catalytic grants, technical assistance, policy and regulatory reform advisory services, capacity building, and institutional strengthening. For example, in Uzbekistan, GFMR allocated $11Mllion to identify and fix methane leaks in the gas transportation network, cutting methane emissions by 9,000 tonnes annually, and potentially reaching up to 100,000 tonnes each year.
“Governments and operators must make flaring reduction a priority, or this practice will persist. The solutions exist. With effective policies we can create favourable conditions that incentivize flaring reduction projects and lead to sustainable, scalable action. We should turn this wasted gas into an engine for economic development.” said Zubin Bamji, World Bank Manager for the Global Flaring & Methane Reduction (GFMR) Partnership.
About:
The World Bank’s GFMR is a multi-donor trust fund supported by governments, companies, and multilateral organizations committed to ending routine gas flaring and reducing methane emissions from the oil and gas sector. The annual Global Gas Flaring Tracker Report is a tool for monitoring and understanding the state of flaring worldwide and the progress made towards achieving Zero Routine Flaring by 2030. GFMR, together with the Payne Institute at the Colorado School of Mines, has developed global gas flaring estimates based upon observations from a satellite launched in 2012 and operated by the U.S. National Oceanic and Atmospheric Administration. The advanced sensors of this satellite detect the heat emitted by gas flares as infrared emissions.
Harry Houdini’s most famous illusion was making a live elephant disappear on stage at the New York Hippodrome in 1918.
Now Donald Trump, US President, and Ursula von der Leyen, European Commission Head, have created a bigger illusion: pledging that the EU will purchase $800Billion of LNG from the USA over the next three years.
The ensuing drama is one of smoke and mirrors and illusions, but above all high-stakes political drama in which natural gas and, of course, LNG and the energy transition play key roles.
A closer analysis of the reality reveals a startling other truth: yes, the US has become Europe’s key supplier of LNG, but the amount of natural gas Europe requires is on the decline; and globally LNG is creating a low-cost market because of an over-supply of LNG and the rise of renewables. In short, a turf war to protect the ever-dwindling requirements of US LNG, especially in Europe.
The Present Market Situation: Emergence of a Low-Cost LNG market?
Europe
The EU-US energy deal is simply the US maneuvering to gain more access to Europe’s gas markets. The United States is the largest supplier of LNG to the EU, accounting for almost 45% of total LNG imports. Imports from the US in 2024 were more than double what they were in 2021.
Russia’s share of EU imports of pipeline gas dropped from over 40% in 2021 to about 11% in 2024. For pipeline gas and LNG combined, Russia accounted for less than 19% of total EU gas imports in 2024.
While imports from Russia declined from over 5.3Trillion cubic feet (Tcf) in 2021 to less than 1.84Tcf in 2024, imports from the US increased from 667Bcf in 2021 to 16Tcf in 2024.
Also imports from Norway grew from 2.8Tcf in 2021 to 3.2Tcf in 2024.
An analysis of EU Member States’ national plans shows that EU gas demand is set to fall from 11.5Tcf in 2023 to 10.7Tcf in 2030, a 7% drop. Between 2021-2023 gas demand dropped 19% from 14.3Tcf to 11.5Tcf.
Asia
While we are witnessing a growing decline for LNG in the EU, this is also the case in Asia. Japan, Asia’s largest LNG importer, has seen a constant decrease in imports since 2018. ”Lackluster demand growth and a massive wave of new export capacity are poised to send global liquefied natural gas (LNG) markets into oversupply within two years. These two trends are developing even faster than anticipated”, notes the Institute for Energy Economics and Financial Analysis (IEEFA)’s analysis of the global LNG market (2024-2028).
Yet the list of new LNG projects coming onstream is growing, ensuring a future surplus of LNG:
United States: Five LNG projects totaling more than 71MMTPA in liquefaction capacity are currently under construction;
Qatar: The development of the North Field complex will boost Qatar’s liquefaction capacity by 64MMTPA through 2030;
Canada: 14MMTPA LNG Canada plant started up in 2025;
Africa: Five projects have reached final investment decision (FID) or are under construction in Africa, totaling almost 14MMTPA of capacity
LNG suppliers are fighting a turf war to maintain market share. It’s a situation which could become very ugly.
Some Inconvenient Truths
Firstly, Luke Haywood, Head of Climate and Energy at the EEB (European Environmental Bureau), Europe’s largest network of environmental non-government organizations (NGOs) highlighted: “This deal flies in the face of the EU’s climate commitments. Tripling U.S. energy imports in just three years isn’t only physically implausible, it would derail the EU’s mid-term decarbonization targets.
Luke Haywood, Head of Climate and Energy at the EEB
“Credible pathways to the EU’s 2030 climate targets are incompatible with more imported oil and gas, slow-to-build nuclear reactors and unproven small modular reactors. We should be doubling down on renewables, energy efficiency and electrification. This deal sends a dangerous and dissonant signal to the world.”
Secondly, while such a deal on paper sounds credible how will it be implemented? Energy contracts–be that LNG or oil–are negotiated between companies on a long-term basis and not subject to the whims of the political class.
According to the EEB replacing the remaining 17% energy supplied by Russia would add only around $10Billion annually, or just 2.5% of total EU energy imports.
Energy experts remain mystified how the $800Billion was arrived at and future explanations of how this will play out.
Yet the over-arching message is that two totally clashing energy perspectives are playing out: under Trump “Drill Baby Drill” has become the US mantra and in Europe, a green muffled and fragmented message, with mixed overtones.
Where did it go so wrong?
Trump World
Ed Crooks, Vice Chair Americas at Wood Mackenzie, casts doubt on Trump’s goal: reducing oil prices and increasing domestic oil production by 3Million barrels of oil equivalent per day by 2028.
Wood Mackenzie’s base case forecast, indicates that goal should be achievable, supported by growth in gas production. Yet according to Crooks,”that base case forecast depended on our projected oil price. With lower prices, that production growth does not materialize. A prolonged $50 a barrel price [for WTI] would result in immediate production declines”.
According to Crooks…”there is a looming contradiction in the Trump administration’s strategy. In an environment of falling oil prices, the industry will be less enthusiastic about increasing production. Even though the administration is broadly supportive of the oil industry, its policies could indicate a period of turbulence”.
Europe’s Dilemma
What is missing in Europe’s messaging is an overarching green message that is appealing, resonating to a greater public, and focused on a long-term basis—25 years—not measured in weeks or months. And a message that shows an understanding of what is happening in Africa and Asia.
Four examples, which have been previously reported in this column, illustrate the various new energy strands which are emerging:
The European Clean Hydrogen Alliance’s “Roadmap on hydrogen standardization”. Setting European standards in this area supports EU ambitions for a climate-neutral carbon economy and the uptake of hydrogen in the European market.
H2 Value Chain: Hyphen Hydrogen Project in Namibia, a $10Billion project for developing green hydrogen which will be exported to Europe;
Kawasaki Heavy Industries Ltd., has now developed the world’s first liquified hydrogen carrier- Suiso (hydrogen) Frontier which could be the start of a fleet of hydrogen carriers; and
The Lobito Corridor which traverses 1300 km east through Angola from the Atlantic Ocean coast to the border with the DRC and within easy reach of the Zambian border a route for the transport of critical raw materials(CRMs) for China, Europe and the USA.
Some Final Thoughts
In the Bloomberg New Energy Outlook 2024 this prediction is made: “Regardless of whether the world heads for net zero or it ultimately proves a stretch too far, the era of fossil fuels’ dominance is coming to an end. Even if the transition is propelled by economics alone, with no further policy drivers to help, renewables could still cross a 50% share of electricity generation at the end of this decade.”
Whether the Trump administration is anti-energy transition, matters little. Time has passed them by. Companies understand that the energy transition is part of the energy mix. Simply harking back to yester-year and nostalgically seeing the oil and gas industry as a future energy solution is an illusion. Even the Trump energy scenario of “Drill Baby Drill” is great politics but poor economics.
Europe must also get its house in order. The green projects referred to above require linkages such as PPP (Private Public Partnerships) involving governments and private companies prepared to invest over a period of 25 years. Not for the faint of heart but serious investments that really count to move towards a lasting energy transformation. Such PPP investments should have ironclad guarantees that legislative gyrations such as Trump’s ”Big Beautiful Bill” could not derail.
Yes, patience, lots of patience is required and only then can we anticipate that green energy will become a societal influence of good.
Perhaps the best sign of whether the energy transition is succeeding is whether we indeed see that the EU continues its illusion of not being able to explain how it will spend $800Billion on US natural gas. Then possibly Houdini will explain how he made his elephant disappear!
Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise. He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe. Kreeft has Dutch and Canadian citizenship and resides in the Netherlands. He writes on a regular basis for Africa Oil + Gas Report, and guest contributor to IEEFA(Institute for Energy Economics and Financial Analysis). His book ‘The 10 Commandments of the Energy Transition ‘is on sale at https://books.friesenpress.com/store/title/119734000211674846/Gerard-Kreeft-The-10-Commandments-of-the-Energy-Transition
French contractor Technip Energies delivered the 3.4Million Metric Tonnes Per Year (MMTPA) Coral South Floating LNG facility off Mozambique in November 2021.
Now it has won a contract for preliminary activities for the same capacity Coral North FLNG, which is designed as a twin of the Coral South project.
Preliminary activities are often a prelude to winning the contract to build the unit itself.
Technip did the preliminary work for Coral South FLNG and went on to build the vessel, which was commissioned in 2022.
In its statement, Technip didn’t mention Coral North by name. It merely declared it had won a ‘large’ contract “to carry out preliminary activities for a floating liquefied natural gas (FLNG) vessel in Africa, which will be effective until September 30, 2025″. It also said that “additional order intake is expected to be booked upon full contract award”.
If Technip gets to build the Coral North FLNG vessel, it will be the fourth such unit the contractor is constructing worldwide, totalling a capacity of 11.6Mllion tons per annum (MMTPA). Technip Energies would clearly be a global leader in the FLNG segment.
The company’s accomplishments have included the much talked about 3.6MMTPA Prelude FLNG in Australia, as well as the PFLNG SATU in Malaysia and, of course, Coral South in Mozambique.
Patrick Pouyanné, TOTALEnergies’ Chairman and CEO, famously said that he would not like to walk around the site of the company’s operated Mozambique Liquefied Natural Gas plant with noticeably large escorts of the Mozambican army.
“We will not build a plant surrounded by troops”, Pouyanné remarked, less than a year after a terrorist attack in the town of Palma, near the project site in the Afungi peninsula in Cabo Delgado province, led to the deaths of hundreds of people and forced TOTAL to declare a Force Majeure on the project in April 2021.
Four years and two months after the attack, the French major is setting up an elaborate security mechanism as it prepares its return to the site of Africa’s largest single LNG construction project.
By resumption in September 2025, the 13Million Tonnes Per Day (13MMTPA) LNG park area on the Afungi peninsula, will be completely inaccessible by land, whether for material deliveries or personnel movement, according to the project starter plan. Supplies, construction materials, and workers will arrive exclusively by sea or air. The project site will be completely fenced off and monitored by surveillance cameras (CCTV) .
The security architecture is meant to minimise the presence of armed personnel.
Workers on the site, mostly of CCS JV, the consortium formed by Saipem, McDermott International, and Chiyoda, as well as subcontractors such as WBHO and Gabriel Couto — will be ferried to and from the Afungi airstrip and through the water ways.
Mr Pouyanné’s misgivings about obvious display of force, in partnership with state security apparatus, was expressed after the Mozambican government gave assurance of improved security in the aftermath of the terror attack.
Critics are often quick to finger the presence of soldiers in hydrocarbon plants in African petro states, as part of a pattern of routine human rights abuses.
And even after Pouyanné’s “We –will- not- build -a -plant –surrounded- by -troops” statement, TOTAL has battled media accusations of human rights abuses in Cabo delgado, most notably by the Paris based Le Monde and the US media platform Politico, which it vigorously defended.
The Mozambique LNG project will monetise over 50Trillion cubic feet of gas stored in reservoirs in 1,600metres of water in Area 1 acreage in the Indian Ocean.
Paris based M&P reported $4.02 per thousand standard cubic feet (Mscf) as its average gas sales price in Tanzania in the first quarter of 2025.
It’s the highest gas sale price that the company has earned in 24 months. The lowest in that period has been $3.76/Mscf, achieved in 1Q 2023.
The entire volume produced by the company is supplied to the domestic market through a state owned pipeline.
But while the realized price has been quite competitive in the context of domestic gas pricing in African economies, the production has not been consistently increasing in the last five quarters.
M&P’s first quarter 2025 production was all of 60.8Million standard cubic feet per day (net), a whopping 21% decrease from the 76.9MMscf/d achieved in the first quarter of 2024.
In the five quarters from 1Q 2024 and 1Q 2025 inclusive), the 1Q 2025 production was the third lowest output.
M&P is the 60% working interest operator of the Mnazi Bay permit, pumping the molecules into the the 532 kilometre long Mnazi Bay to Dar es Salaam facility.
Africa is currently locked with the global energy system in an intense debate about what role its vast gas resources should play in the global energy transition.
Beyond that is the wider question about what comes first – development or transition?
The West-led industrialized world is leading the argument that, with the risk of irreversible rise in global temperatures, and the disaster it could bring, the world must roll back the use of carbon emitting fuels, including natural gas. Instead, everyone must embrace greener alternatives like solar and wind, and any investment in extractive hydrocarbons must increasingly be short term.
As President Joe Biden’s climate ambassador, John Kerry led the charge for this line of argument, prior to the inauguration of Donald Trump, who scuttled the American renewable energy initiative.
“Can a conversation be held around accelerating mass adoption of LPG as domestic gas in exchange for deforestation in sub-Saharan Africa with firewood and other biomass, with all the conflicts it produces? Afterall, the reality is that as Africa’s rising population is increasing emissions by felling more and more trees for firewood. How can such resource utilization swaps be quantified and readied for as a case for investment, with what guarantees, and by whom? That is the line that needs to be pursued.”
Mr. Kerry toured the African continent, spreading a warning: even if gas were to serve as a transition fuel for Africa, any investment with a time horizon beyond ten years would not be viable and should be abandoned. To African environment ministers gathered in Senegal in September 2022 he said: “We are not saying no gas. (But) we do not have to rush to go backward, we need to be very careful about exactly how much we are going to deploy, how it is going to be paid for, over what period of time and how do you capture the emissions.”1
Yet, it’s not just one voice that is calling for the commercialization of Africa’s 625Trillion cubic feet (Tcf) gas reserves before it’s timed out by the transition to lower carbon fuels. A world economic Forum report in 2021 sums it up, quoting Fatih Birol, Executive Director of International Energy Agency: “If we make a list of the top 500 things we need to do to be in line with our climate targets, what Africa does with its natural gas does not make that list. New long lead time gas projects risk failing to recover their upfront costs if the world is successful in bringing down gas demand in line with reaching net zero emissions by mid‐century.”2
At the other end are energy poor, less developed nations, many of which are in Africa. With most of hydrocarbon resource-rich Africa just beginning to exploit its natural resources, and very far behind in global development goals, many feel that it is only fair that Africa is allowed to leverage its gas for economic development. For instance, it would provide electricity, without which schools, homes and factories cannot do what is needed to roll back poverty, Goal 7 of the UN Sustainable Development Goals is : “Ensure access to affordable, reliable, sustainable and modern energy for all.”
Currently, Africa lags all other regions on this universally charted goal despite its enormous natural gas reserves, which make up nearly 15% of the world’s volume. The continent’s leaders therefore argue that, since gas is less of a polluter, it could play the role of a transition fuel, a midway between carbon-heavy fuels like coal and crude oil on one hand and on the most desirable end of the green spectrum, renewables. The point is made that, yes, the environment may be at risk, but in Africa, people are at graver risk of basic survival.
The International Energy Agency estimates that despite the abundance of natural gas on the continent, more than 600Million, or about half of the people in Africa, do not have access to electricity, a utility that people in the developed world take for granted. This is a disproportionate 72% of such energy poor people in the world.
“Unfortunately, African gas owning nations did not sufficiently leverage the gas-panic in Europe to negotiate substantial gas development financing in Africa. Nigeria for instance has barely even recognized this opportunity, least of all exploit it. It is a prime role of industry thought leaders such as the Nigeria Gas Association to nudge policy makers towards what is achievable, rather than what is not.”
To understand what this means at country level, take Nigeria for example. Here’s what the World Bank recently reported: “85Million Nigerians don’t have access to grid electricity. This represents 43% of the country’s population. It makes Nigeria the country with the largest energy access deficit in the world. The lack of reliable power is a significant constraint for citizens and businesses, resulting on annual economic losses estimated at $26.2Billion (₦10.1Trillion) which is equivalent to about 2% of GDP. According to the 2020 World Bank Doing Business report, Nigeria ranks 171 out of 190 countries in getting electricity and electricity access is seen as one of the major constraints for the private sector.”3.
Regarding the debate about Africa’s energy paradox, the transition versus development challenge, we’ve been this way before. Remember the debate about whether the world should embrace computers, for fear that devices could replace humans and a global loss of jobs and livelihoods would follow if computers became ubiquitous and robots took over offices and shop floors. More recently, we all remember the battle about globalization, whether nations ought to allow their corporate citizens to relocate production activities – read jobs – to countries where labour is cheaper, then repatriate the finished goods to the home market where the purchasing power is stronger. Time has answered these debates, and the answer is the same: economy trumps politics when the chips are down.
It’s no different on the energy front. In an age when transition economics has gained momentum and is accelerating towards greener energy, Africa can only succeed in leveraging its immense gas resources, through pragmatic engagement of the rest of the world, not through sentimentalism. This is especially so because gas peculiarly requires a large outlay of capital to develop, produce, transport, and deliver, and must be traded across all over the world with buyers who must enter long term commercial commitments. Even for domestic applications such as power generation a certain quantum of funded demand and capital investment in infrastructure is required to make gas to power projects viable.
How then must Africa begin the effort to successfully position gas a transition fuel and development driver? Africa must first recognize that energy is a strategic resource not a transactional commodity nor a pure political tool, then go from there.
How so? Africa must, one, build a compelling continental consensus about gas as a transition tool, which implies a recognition that transition is an imperative. Two, the continent must develop workable frameworks to translate such a consensus into a commercial engagement with itself and the global energy system (suppliers and buyers). Three, Africa must collectively develop a viable model for accommodating the role of other energy types including the smaller spectrum of the extractive hydrocarbons and non-hydrocarbon derivative fuels such as nuclear and hydrogen, all the way to biofuels and renewables such as solar.
Let’s step back a bit. In the early industrial era, when raw human labour drove industrialization, Africa not only lost out, but it also collectively suffered the deprivation of supplying slave labour to many other parts of the world as they industrialized, without any corresponding value gain. This is not a political reality but a fact of economic history. In the post-industrial era, when raw materials needed to feed the machines became more strategically important than human labour, Africa became the poorly positioned source of all manner of raw materials from diamond to oil and now rare metals to feed the digital electro-machines. Again, this is an economic fact of history, and the outcome of disproportionate positioning. Now, in the age of energy transition, Africa would be missing the target if it relies merely on moaning, sloganeering or summit activism.
The sort of consensus building and hard-grinding work that produced Africa Free Trade Agreement, rather than complaining ad nauseum at UN meetings, needs to take over.
Africa needs to develop a single viable, sellable framework for positioning gas as a viable transition fuel, within a broader continental framework that syncs with both the transition momentum and the wider energy spectrum, one that sits within the balance between development and transition, in a digital-driven world. Concepts like “just transition” may sound nice and even justifiable, but that’s not how the world works. It is true that Africa has 20% of the world’s population, and only 3% contribution to warming emissions, yet bears the brunt of the negative impacts of climate change. But is also true that the world is moving in the direction of renewables. For instance, around year 2002 and 2007, only about 200 gigawatts of renewable power was added globally, between 2017 and 2022, the figure jumped to 1800 gigawatts.
Africa and its energy policy makers will only start to engage the world when they start to speak in the language that matters: the language of economic realities. To begin with, it needs to start connecting the continent’s resource exploitation objectives with global priorities such as reducing carbon emissions, recognizing the full spectrum of resource options, impacts and investment needs, markets and sources of both capital and technology.
We need more of the kind of language in the quote below from Nigeria’s Vice President Yemi Osinbajo: “The energy access element of the energy transition must be linked with the emissions reduction aspect of the energy transition. For too long, we have considered these to be parallel tracks. If energy access issues are left unaddressed, we will continue to see growing energy demand being addressed with high polluting and deforesting fuels such as diesel, kerosene, and firewood.”4. Unfortunately, in the current body of engagement between Africa and the rest of the world on energy transition, tends to focus on phantasies and denial, as if clamouring for some sort of “energy reparation.”
Regarding the amount of investment Africa requires to meet global development targets, the International Energy Agency states: “The goal of universal access to modern energy calls for investment of $25Billion per year. This is around 1% of global energy investment today, and similar to the cost of building just one large liquefied natural gas (LNG) terminal. Stimulating more investment requires international support aided by stronger national institutions on the ground laying out clear access strategies – only around 25 African countries have them today.”5
So, it just wouldn’t do to merely clench the fist and declare that Africa can decide its own path to transition and what fuel to use to drive development, especially since Africa contributed little to global warming in the first place, compared to the industrialized world that spewed all the carbon into the atmosphere. All that may be true. Again, it is also true that Africa today, in the post-COVID economic reality, is in no position to muster the capital to develop neither its gas resources nor the purchasing power to pay for its deployment to electricity or anything, without the rest of the world. Africa cannot on its own, either as individual countries or even as a collective, determine and realize its energy future and how it would play in its development trajectory, least of all the role of a complex resource such as natural gas. Africa must engage the energy world, rather indulge in denial. Otherwise, the continent will miss the transition train.
Happily, there are ways to do this. In fact, the tools for such productive engagement already exist. Let’s highlight just a few of them.
Redefinition of development
Today, there is already a move globally towards a more inclusive definition of development. Sustainable development has replaced plain vanilla development. The World Bank Spring meeting in 2023 was themed “Reshaping Development for a New Era.” So, there is a global acceptance that classic development is not a viable goal anymore; it needs to be made more resilient and sustainable for a world racked with poverty, climate change and digital disruption.
This reopening and redefinition of development presents a fresh window for Africa to engage and table its dilemma of resource wealth and energy poverty, as part of the reframing agenda. Is it possible for instance to find accommodation, under certain ring-fences, to extend the time horizon for shutting down hydrocarbon investment beyond 2030 where it currently pegged in most of Europe and the industrialized West, to allow for transition gas investment? How and where would a 5 or 10-year extension be offset, in terms of targeted investment in gas rich nations to in exchange for supply into energy starved rich countries? Can a conversation be held around accelerating mass adoption of LPG as domestic gas in exchange for deforestation in sub-Saharan Africa with firewood and other biomass, with all the conflicts it produces? Afterall, the reality is that as Africa continues to lag in clean fuel adoption its rising population is increasing emissions by felling more and more trees for firewood. How can such resource utilization swaps be quantified and readied for as a case for investment, with what guarantees, and by whom? That is the line that needs to be pursued.
The Russia-Ukraine war
The war in Europe has demonstrated the interdependency of nations regarding such resources as oil, gas and even grains. When the war broke out in early 2022, Europe was alarmed by the prospect of Russia weaponizing its gas supply to Europe, resulting in European leaders heading to Africa and anywhere else it could sniff near-term gas supply. Similarly, Africa panicked, since like much of the world, it relied so much on grains coming from Ukraine. Quick fixes had to be worked out to enable Europe to continue receiving Russian gas through last winter, and for Ukrainian wheat to be evacuated to international markets. In the first year of the war, just three European countries, Germany, France, and Italy imported over $20Billion worth of Russian gas despite sanctions, price caps and the like.
Elsewhere, India used the opportunity of the low price of Russian gas due to the war to triple its gas import from that Eastern European country within the year to about $30Billion, procuring the fuel its needs to power its industrial machine, and to meet the target of providing 50million homes with LPG access. This is a huge market loss to Nigeria for instance, which relies heavily on India as a buyer since the US purchases dropped off when its shale turned US from a net imported to a net exporter. Conversely, South Africa which like India has adopted a pragmatic engagement with Russia through the War, has failed to negotiate any relief for its domestic power crisis that has hobbled its economy in the last year. Our point is that the War in Europe offered African gas producers the opportunity to negotiate an energy-mix consensus within the continent. It also offered the urgency to gain the world’s attention, especially Europe, to rally the necessary investment to develop its gas as a transition fuel at scale, and not waste that crisis.
Unfortunately, African gas owning nations did not sufficiently leverage the gas-panic in Europe to negotiate substantial gas development financing in Africa. Nigeria for instance has barely even recognized this opportunity, least of all exploit it. It is a prime role of industry thought leaders such as the Nigeria Gas Association to nudge policy makers towards what is achievable, rather than what is not.
Africa Free Trade Agreement
The unprecedented continental free trade agreement has created the world’s largest trading bloc, measured by the number of participating countries. The World Bank captures its significance this way: “The pact connects 1.3Billion people across 55 countries with a combined gross domestic product (GDP) valued at $3.4Trillion. It has the potential to lift 30Million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.”6
What does AfCFTA has to do with gas as a transition fuel? For one thing, it presents perhaps the most compelling recent example of continent-wide collective action on an economic agenda. If concerted necessity and action can deliver a trade agreement, why not a gas development agreement?
Secondly the economic and commercial activities that AfCFTA could potentially deliver should be channeled into a demand pool that can underpin significant gas project investment at the scale needed to make such significant investment viable. There is also the possibility of using it to create a continental gas market rather than just the national domestic demand that countries like Nigeria have had very little success in force-feeding on its own economy, with understandable resistance by the private sector. How do you power the transportation and the manufacturing capacity needed to deliver the economic activity that AfCFTA targets (eliminate 90% of tariffs, generate $450 billion in new incomes and lift some 30million Africans from poverty by 2035)? Gas could come handy.
Thirdly, the trade agreement has captured the world’s attention, a rare convening power that could be exploited to negotiate the scope and mechanics of gas as a transition fuel not just in Africa but wherever that bridge needs to be built.
History of energy transitions
The history of global energy transitions presents both a sobering lesson and a practical reference as to relating economic development to energy supply and demand realities. If well considered, African energy policy makers can find therein the insights they need to build viable constructs to exploit the gas resources as a viable transition fuel.
The first lesson is that energy transitions follow technology as inevitable outcomes. The chart below shows for instance, that as the world moved from horse drawn carts and manual farming powered by slave labor in the 1800’s to coal-fired engines in the 1900’s, traditional biomass gave way to a peak in coal use. And as oil-driven automobiles and gas-fueled power plants became more ubiquitous through the 1990’s and the millennium switch, an unavoidable transition to oil and gas happened. Today biomass occupies about the ratios coal used to command in the 1850’s.
The lesson: energy transition follows technology. Africa needs to recognize this, embrace it, and go from there, rather than attempt to fight it. Fortunately, even electric cars must be manufactured often in gas powered factories for the foreseeable future. Mid-industrial powerhouse economies such as India and China need gas to support their huge populations and the industrial complexes that support it. Africa needs to, not only have a commercial conversation with such markets about its gas, but also copy its pragmatism to support their own relatively large and young populations.
Carbon trading
Carbon trading presents a mature concept, globally accepted, but poorly leveraged by Africa. The idea of offsetting carbon emission with greener investment on a virtual commodity exchange is brilliant. Africa is well positioned for this, but its policy makers are either poorly informed or distracted. Think how much credit sub-Saharan Africa could get by quantifying and commercializing its naturally occurring green forests a carbon trading commodity rather than fallow waste. Could such credit be channeled into low carbon gas projects as a more palatable alternative to crude oil for instance?
Surely, a conversation can be ignited with heavy emitters like China and India which are under pressure to reduce their carbon contribution to global warming. Similarly, a carbon offset conversation can be initiated large oil and gas multinationals who are facing pressure from their investors to reduce the high-emission crude oil projects, which that the companies are insisting they still need to maintain current revenues.
Viable options need to be proposed for investing in lower carbon gas projects in Africa if such can be quantified in carbon offset value terms, rather than resorting to throttling up gas project taxes that end up financing public sector corruption. The reserves addition bonus in Nigeria became an effective policy that produced the big offshore projects in Nigeria such as Bonga and Erha. Such policies anchored on reality, should be engineered, on a national and continental scale, targeted not just at fiscal incentives but also at the desire of large investors to gain carbon relief.
US Gas commercialization precedent
As 1980 arrived, the US was importing nearly 1Tcf of gas and exporting practically none. By 2021, the country was importing 2.8Tcf and exporting over 6tcf. Summing up the switch, US Energy Information Administration (EIA) says of the data it tracks: “Total U.S. annual natural gas imports in 2007 reached about 4.61 trillion cubic feet (tcf) (12.62 billion cubic feet per day [bcf/d]) and have generally declined each year since then. In 2021, total annual U.S. natural gas imports were about 2.81Tcf (7.29 Bcf/d).” 7
What happened, and what’s the lesson for Africa’s gas-led transition? One only needs to look at the timing of US switching from net gas importer to net exporter. It happened around the time technology unlocked the commercial value of shale gas, of which the US had an abundance. US became awash with shale gas, so much so that it needed not only to push through new laws to allow for gas export, but it also needed to physically reconfigure its import terminals to face the other direction as massive export terminals!
Lesson one is that politics, even transition politics, is overshadowed by economic priorities. The leader of the charge against Africa exploiting its gas long term, is currently exporting more gas than all of Africa! Second, transition can coexist with investment. The US has not abandoned the gas as a lower-emission alternative to coal (of which it still uses plenty, some 50Million short tons every year, mostly for power generation).8 Nor has it stopped urging the world to work to lower emissions and to push for alternatives at the same time. Interestingly, the largest gas trading partner of the US is its neighbor, Canada.
“The point is made that, yes, the environment may be at risk, but in Africa, people are at graver risk of basic survival”
In conclusion, Africa has done well to push back a bit on the mandate to join the push for decarbonize, and to draw attention to its developmental needs and resources and seek to position gas as a transition fuel. But that is only the beginning. It will take much more to make that proposition viable, to build a consensus on it within the continent and to coax to world to buy in.
Somewhere in the global mix of frameworks, examples, and precedents, such as those we’ve highlighted, lie the sort of pragmatic progression that Africa needs to seek, and build first internally, then in concert with the rest of the world which needs both energy for sustainable development and to reduce the impact of climate change.
Dozie Arinze (Ph.D) is the president of Pedestal Africa Limited and Proxima Energy Limited.
This is the first of a planned, frequent contribution to Africa Oil+Gas Report
The government of Mozambique has approved ENI’s plan to invest $7.2Billion on the Coral Norte Floating LNG project, an exact replica of the Coral Sul FLNG facility that exported its first cargo in late 2022.
Coral Norte will drain reserves in the north of Coral field, just as the Coral Sul has drained reserves in the south of Coral field in Area 4, deepwater Rovuma basin, in the Indian Ocean.
The approved Coral Norte project involves six subsea wells that will be tied back to an FLNG vessel. The capacity is 3.5Million tonnes per year (3.5MMTA), just the same as Coral Sul.
If construction commences in 2025, production will begin in 2028. The project is expected to last 30 years.
The decision to approve the project was communicated on April 9, 2025 by Inocêncio Impissa spokesman for the Mozambican executive cabinet, known as Council of Ministers, at a press conference after the weekly government meeting in Maputo.
Harry Houdini’s most famous illusion was making a live elephant disappear on stage at the New York Hippodrome in 1918.
Luke Haywood, Head of Climate and Energy at the EEB
