Africa must capitalise on high global LNG demand: Rystad Energy

With Africa continuing to increasingly focus on natural gas production as a greener alternative to oil production, this is high time the continent steps up to have its natural gas infrastructure in place 

Energy intelligence firm, Rystad Energy, has predicted that with gas demand set to see an upsurge, the global production count of liquefied natural gas (LNG) is likely to reach 755 Mtpa in 2030 from last year's 486 Mtpa. 

The demand will also be driven by the fact that not all regions are equipped with good production capacities or pipelines access.

This, however, is not the case for Africa which hosts about 20% of the 477 Mtpa total —around 93 Mtpa— of global LNG capacity in the pipeline. These include under-construction projects, confirmed final investment decision (FID) or pre-FID. 

In fact, the testatment to Africa's significance in the global gas market lies in its attracting the highest concentration of FLNG infrastructure in the world. It currently hosts an onshore LNG production capacity of approximately 70 Mtpa, accounting for around 14% of the global total.

Nigeria leading LNG production count

While Rystad Energy has found that Nigeria leads these statistics by almost half the continent's total LNG production count, the country still struggles to reach its full potential owing to vandalism and theft-related challenges. Its annual liquefaction rates have taken a hit from an average of 90% in 2018 to 60% last year. 

With the right installations such as  floating LNG (FLNG) and smaller-scale mini-LNG projects, Nigeria's exports capacity can rise 20 million tonnes (Mt) by 2030. 

Nigeria makes West Africa the hub of LNG production, making up nearly two-thirds of the sub-Saharan Africa's output and more than one-third of the continent’s total. West Africa's LNG production count is set to reach 50% by 2030. 

"Nigeria has consistently ranked among the top LNG producers globally, despite export volumes being much smaller than those of the US, Australia and Qatar. Nigerian LNG, which is positioned outside the ongoing US tariff war, offers crucial flexibility for Asian and European buyers thanks to its strategic location and shorter transit times compared to US LNG exports. However, ongoing pipeline vandalism and oil theft continue to hinder Nigeria’s ability to fully capitalise on its resources. While we expect Nigeria's LNG exports to recover, they are unlikely to place the country among the top five global exporters in the near future," said Antonia Syn, analyst - commodities markets, Rystad Energy.