The Republic of the Congo – sub-Saharan Africa’s third-largest producer – is already a regional leader regarding natural gas monetization and utilization, and recent developments are propelling the central African nation even further. With over 10 trillion cubic feet of proven natural gas reserves, the country has been quick to use its resources as a catalyst for sustainable economic growth. Now, with its comprehensive Gas Master Plan (GMP) – a medium to long-term strategy for the scaling-up of natural gas investment and development in the country – the Congo is poised to undergo accelerated growth within its already competitive gas industry.
The GMP marks a pivotal moment in the country’s economic history, illustrating the government’s bold actions to build upon its existing resources to stimulate growth and achieve greater economic diversification through strategic policymaking. Developed by the Ministry of Hydrocarbons, in collaboration with Wood Mackenzie Ltd. and under the direction of the Société Nationale des Pétroles du Congo (SNPC), the GMP serves as a program of action and overarching framework for the increased utilization of national gas resources.
Specifically, the GMP offers stakeholders and investors a clear vision with regards to the steps required to fully optimize the country’s natural gas resources. Primary aims of the GMP include economic diversification; enhancing government revenue; driving investment; resource maximization; and prioritizing social benefits. Through the GMP, the Congo is set to position itself as a highly attractive and globally competitive African gas economy.
Economic diversification has been the Congo’s primary concern over the last decade, with the country having adversely experienced the financial downturn of the 2014-2016 oil crisis, the COVID-19 pandemic, as well as production declines on a number of its oil sites. The GMP, therefore, places gas at the forefront of diversification, with the resource offering a myriad of economic opportunities including electrification, industrialization, and exports. By providing a framework for monetizing resources, the GMP aims to enhance gas-directed investment and infrastructure development, while at the same time improving government revenue which will be re-injected into the economy.
The Congo has already seen some success regarding gas monetization, with the country focusing on gas commercialization at key oilfields to spur electrification and industrialization across the country. With a significant amount of the country’s gas resources flared, the government, through the GMP, has moved to monetize these resources. Accordingly, projects such as the Centrale Électrique du Djėno (CED) and Centrale Électrique du Congo (CEC) gas-fired power plants – operated by Eni, the largest gas producer in the country – aim to reduce flaring by utilizing associated natural gas from the M’Boundi and Marine XII fields. As of March 2020, when a third turbine was added to both the CEC and CED plants, installed capacity increased by 184MW and by 170MW, respectively. The CEC is now responsible for producing approximately 70% of all the country’s electricity.
Meanwhile, with only 59% of urban dewlers and 12% of the rural population currently with access to electricity, the Congo is committed to enhancing electrification and ensuring the populace benefits from natural resource exploitation. In this regard, the GMP has emphasized the role that natural gas will play, with key considerations being placed on gas-fired generation and distribution. With the country’s revised Hydrocarbon Code reducing royalties for natural gas from 15% to 5%, the government has already ensured gas investments remain competitive in this reduced capital expenditure climate, and the GMP serves to only enhance this trend.
As gas continues to be the main energy source for the country’s power consumption in the short-to-medium term, the application of efficient policies – through the GMP – remains key to ensuring rapid and sustainable growth. The GMP represents a key topic that will be addressed at the country’s official energy event – the Congo International Energy Summit (CIES), taking place in Congo on the 15th – 17th of June 2022. At CIES, industry leaders and government representatives will offer valuable insight into the GMP and the opportunities that have emerged out of it.