*The African Energy Chamber advocates before the African continent moves to help Europe with its energy crisis, gas producers should focus on African demand first, as economic growth hinges on the continent鈥檚 utilisation of its resources, particularly gas

Gbenga Kayode | 绿帽献妻

The African Energy Chamber (AEC) has said that West African countries can use their gas resources to improve energy access and ensure economic growth continentally.

绿帽献妻 reports the Chamber in a recent statement, however, noted that massive investments need to be made across the upstream, midstream and downstream sectors to attain this in the sub-region.

The AEC said: 鈥淓xpanding gas production and supply is critical to supporting economic development, addressing energy poverty and achieving energy independence across the African continent, and countries, such as Senegal and Mauritania, blessed with significant resources and pursuing large-scale project developments, have the opportunity to kick-start the continent鈥檚 economic growth.鈥�

According to the group, before the continent looks to help Europe with its energy crisis, gas producers should focus on African demand, as economic growth hinges on the continent鈥檚 utilisation of its resources, and in particular, its gas.

Therefore, by redirecting investment in key assets in the MSGBC region, Africa can benefit from a myriad of economic opportunities, it stated.

According to AEC, Africa is well-positioned to drive sustainable economic growth continent-wide through the monetisation and utilisation of gas.

It further said: 鈥淔irstly, expanding gas production will enable African economies to achieve energy security which is vital for industrialisation and socioeconomic growth.鈥�

Referencing a 2018 study compiled by the Energy for Growth Hub, the Chamber said that economic growth and employment creation in Africa are being restricted by a lack of affordable and reliable energy in nearly every African country.

The study reiterated that power outages reduce employment opportunities by between 35 percent and 41 percent and as such, by expanding the gas market, African economies can create employment across the entire energy value chain, and thus, accelerate economic growth as well as the introduction and resumption of key sub-sectors including manufacturing, agriculture and transportation.

With energy security considered the backbone of the economy, Senegal and Mauritania are well-positioned to usher in a new era of sustainable economic growth through gas utilisation.

Secondly, investing in African gas can help make energy poverty history by 2030, with countries such in west Africa significantly improving energy access and clean power generation both regionally and continentally.

鈥淚n 2022, over 600 million people are still without access to electricity, and by implementing a clear gas-to-power plan that utilises gas from major projects such as the Grand Tortue Ahmeyim (GTA) development 鈥搒et to unlock 15 trillion cubic feet (tcf) of gas 鈥� Senegal and Mauritania have prioritised power generation and electrification,鈥� it stated.

As a region heavily reliant on expensive, diesel power, gas-to-power could not only significantly improve energy access but dramatically reduce carbon emissions.

AEC added: 鈥淎frica must look at balancing its exports and domestic utilisation regarding gas. While countries in Europe are looking to ramp up gas imports in light of the Russia-Ukraine conflict, Africa must first prioritise its domestic needs.

鈥淎ccordingly, a mutually beneficial and cooperative relationship must occur. Firstly, Europe must invest in African gas so that the continent is better positioned to increase its exports.

鈥淪econdly, Africa must utilise this investment to establish the adequate export and distribution infrastructure across the continent so that gas can be exported and utilised for power generation, energy security and poverty alleviation.

NJ Ayuk, Executive Chairman of AEC also said: 鈥淐ountries such as Senegal and Mauritania can lead in this regard, serving as an example for other resource rich nations looking to utilise and monetise gas.鈥�

Meanwhile, by monetising their gas resources, countries such as Senegal and Mauritania will be able to invest in large-scale infrastructure and development projects, driven by export earnings from gas.

Africa鈥檚 power generation mix in 2022

The International Energy Agency (IEA) projects net income from gas will increase from $57 billion in 2018 to approximately $200 billion by 2040 in the 10 top gas-producing countries in Africa.

The Chamber also stated this would provide African hydrocarbon producers, such as Senegal and Mauritania with revenues which they can use to further develop the energy and infrastructure sector or to invest in the expansion of other sectors.

Algeria, for instance, which generated over $3.2 billion in revenue from its natural gas exports between January and September 2020, according to research firm Statista, could leverage energy revenues for economic growth.

At the same time, Mozambique, which according to the Energy for Growth Hub, could reap $95 billion in revenues from its gas over the next 25 years, and thus, could make use of profits for market expansion, infrastructure development and overall economic growth. Senegal and Mauritania stand to learn from these countries and have already made significant progress in this regard.

With natural gas set to account for a lion鈥檚 share (39%) of Africa鈥檚 power generation mix in 2022, according to the AEC鈥檚 Q1 2022 Outlook, and demand doubling through to 2040, according to the International Energy Agency (IEA), expanding gas production across the continent has become crucial to accelerating economic growth.

While the international community is looking at Africa to meet global gas demand, the continent must first prioritise its own development and security.

The AEC鈥檚 annual event, African Energy Week (AEW) 2022, slated for October 18-21, 2022, in Cape Town, South Africa, and under the theme, 鈥楨xploring and Investing in Africa鈥檚 Energy Future while Driving an Enabling Environment鈥�, will discuss the regulatory requirements which African hydrocarbon producers need to put in place to develop capital-attractive regimes to enable the full utilisation of energy resources to alleviate energy poverty across the continent.

AEW 2022 will host panel discussions, presentations and high-level meetings to discuss the role gas will play in helping the continent to achieve its industrialisation goals and climate mitigation strategies.

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