The Liquefied Natural Gas (LNG) production capacity in Sub-Saharan Africa (SSA) is expected to be more than double over a 10- year forecast period, according to Fitch Report recently released.
The main drivers of the LNG demand growth are set to be Asian emerging markets. Available 2017 data indicates that Asian buyers already accounted for 38% of LNG exports from SSA producers at the time, only Angola, Nigeria and Equatorial Guinea.
“We forecast this trend to accentuate as Asian markets increasingly and themselves in the driving seat of global LNG demand.
“Looking ahead, this trend is also illustrated by the pre-eminence of Asian buyers in GSPAs for some LNG projects in Sub-Saharan Africa, such as Anadarko’s Mozambique onshore project, scheduled for FID next year,” the report said.
According to the report, the advantages of floating LNG (FLNG) facilities are well suited to the monetisation of under-developed gas resources in sub-Saharan Africa and represent an increasingly attractive option that allows operators to fast-track resources to market.
“We believe that SSA will increasingly benefit from its strategic location vis-a-vis energy-hungry Asian markets driving the bulk of global LNG demand growth.
“We anticipate liquefied natural gas (LNG) production capacity in Sub-Saharan Africa to more than double over our 10-year forecast period. We estimate that LNG output capacity across Sub-Saharan Africa will reach 78.5mtpa in 2027, from around 33mtpa in 2018.”
The rapid growth will be mainly driven by large-scale projects in Mozambique.
Two competing onshore LNG terminals are currently in the pipeline. The first one, which will be built by a consortium led by Texas-based Anadarko, will involve two liquefaction trains with a total capacity of 12.9mtpa. As Anadarko is progressively securing gas sales and purchase agreements (GSPAs), the report estimates that there is a good chance that the $20bn project remains on track for final investment decision (FID) in H1 2019 with 2024 as a target for first LNG.