Energy Capital & Power

Leveraging Regional Gas Networks for Sustained Economic Growth

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With the discovery of significant natural gas resources across the African continent in recent years, and the global recognition of gas as an ideal transitionary resource in the shift to clean energy fuels, African stakeholders are aggressively pursuing gas-directed investment and development. With gas-rich countries across the continent turning their attention to resource exploitation, opportunities have emerged for the monetization and utilization both domestically and on a regional basis. Notably, through the establishment of regional natural gas networks through associated infrastructure developments, Africa can accelerate energy sector growth while ensuring the cross-border uptake of resources.

The west African region, specifically, has seen notable success in this area with the development of the West Africa Gas Pipeline (WAGP) – a 681km gas pipeline linking Nigeria’s gas-rich Niger Delta region to regional countries Benin, Togo and Ghana. The WAGP, operated by the West African Gas Pipeline Company – a consortium comprising Chevron West African Gas Pipeline (36.9%), Nigerian National Petroleum Corporation (24.9%), Shell Overseas Holdings Limited (17.9%), Takoradi Power Company Limited (16.3%), Societe Togolaise de Gaz (2%) and Societe BenGaz S.A. (2%) – is the regions first natural gas transmission system. Providing a viable regional gas network, the WAGP enables regional countries to utilize Nigeria’s impressive 200 trillion cubic feet (tcf) of gas, boosting energy access and socio-economic development.

Demonstrating the value of successful regional collaboration, the WAGP serves as a trend for other gas-rich regions in Africa. The most notable of these is the Southern African Development Community (SADC) region. With over 100 tcf of gas reserves in Mozambique and 57 tcf in Tanzania, coupled with a growing regional demand for clean energy solutions, the region could significantly benefit from an established natural gas network. Countries such as Zimbabwe, with no proven hydrocarbon resources as of yet, and South Africa, with its crippling power shortages hindering effective economic growth, are evidenced as high demand markets that would benefit from regional gas supply. By establishing Mozambique and Tanzania as a regional natural gas hub, and directing investment towards associated trade infrastructure, the SADC region can accelerate socio-economic development, address energy poverty, and ensure a sustainable and long-term energy source for years to come.

Meanwhile, other emerging natural gas hubs in the Economic Community of Central African States (CEMAC) can also be established as enablers of regional gas utilization and distribution. Equatorial Guinea, for example, with its 1.3 tcf of gas reserves, and Gabon, with its 1 tcf, have all the ingredients to be regional gas producers and distributors, all they require is adequate investment. The CEMAC region’s high demand serves as an ideal target market for these hubs, with regional gas networks significantly enhancing regional developmental opportunities. By directing investment towards cross-border transportation systems, such as pipelines, African stakeholders can create efficient gas networks and monetize their resources while meeting domestic demand.

In pursuit of accelerated cross-border collaboration in Africa, initiatives such as the African Continental Free Trade Agreement (AfCFTA) have emerged as enablers of regional trade. Implemented in January 2021, and covering the entire African continent, the AfCFTA aims to reduce barriers to trade, simplify processes, and incentivize cross-border engagement and cooperation. The AfCFTA provides the backbone for sustainable regional trade, and by leveraging this progressive policy, countries can create viable natural gas networks that will transform Africa’s energy sector and catapult the continent towards sustained economic growth.

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Charné Hollands

Charné Hollands

Charné Hollands is the Deputy Editor at Energy Capital & Power. She holds a Higher Certificate in Professional Photography and Masters in Media Studies from the University of Cape Town. Charné writes content for ECP's website and events as well as co-authored African Energy Chamber: Road to Recovery.