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Parallels with Latin America for African oil and gas industry at International Gas Union event

A roundtable event organised by Energynet brought together representatives from the African and Latin American energy industry and International Gas Union (IGU)

Held yesterday in London, the roundtable started with an introduction by new IGU president Luis Bertrán Rafecas. He cited Africa and Latin America as two of the markets where gas demand is expected to continue to increase until at least 2040, and highlighted the importance of gas in the energy mix as an affordable fuel and one that can play an important role in climate change mitigation, especially in regard to meeting the obligations of the 2015 Paris Agreement. He also raised the issue of gas transportation as a major challenge across the African and Latin American markets. Other parallels between the gas markets of Africa and Latin America which were raised at the roundtable included the issue of deregulation for increased private sector involvement, the opportunities presented to the gas industry to supply power when hydro projects are affected by drought, and using gas to improve access to affordable energy to elevate people out of poverty, and energy reform working hand in hand with the reconfiguration of economies.

Karén Breytenbach, representing IPP Projects, South Africa, talked at length about the transport and infrastructure challenges facing South Africa's burgeoning gas industry. She said that rather than rushing to build pipelines, a more sensible approach is to start with transporting gas to customers in a liquefied form and then determining whether it is worth investing in expensive pipeline projects.

Multiple uses of gas are worth examining, Ms Breytenbach told the event. In regard to LNG, partnerships are required with the motor vehicle industry to boost sales of LNG-powered cars, according to Ms Breytenbach, adding that LNG trucks powered by LNG fuel can help create the market. Floating LNG facilities are also important for boosting the gas industry.

"Gas-to-power is too expensive to do as a stand-alone as the rand is very volatile," she said. "[But] if you have a good energy mix, you will get cheaper electricity."

Ms Breytenbach added that as well as focusing on local markets within South Africa, it is important to look at expanding across the southern part of the continent, with potential in markets such as Botswana and Mozambique.

Idris Muhammad, president/CEO of consultancy firm Dell'Amore and an adviser to the Nigerian government, spoke of the "huge potential" of the Nigerian gas market, with its large population and growing energy requirements, for investors.

"The political environment is in favour of protecting foreign investors," said Mr Muhammad of the government's aim to create an enabling environment for the private sector. "There is no better time than now to come to Nigeria."

Payment of cash calls by the Nigerian government to private companies has improved, Mr Muhammad told the event. "Around US$350mn to offset some of the companies' outstanding liabilities [has been paid] - if that's effectively done, foreign investors will be satisfied."

"There is interest in getting investors from continental Europe," said Mr Muhammad. "Chinese investors are interested in Nigeria but it should not all be left to China."