African LNG:

incremental
gains add up

Increased use of existing LNG facilities, with

new FLNGs under development and others in
the pipeline could boost African LNG volumes
significantly. But larger-scale onshore,
greenfield projects are unlikely to start
flowing much before 2030.
ROSS MCCRACKEN

Africa has multiple prospects for new LNG supply, but Europe, which jumped from 21 to 34.1 bcm.
many of the quickest options lie with existing producers
and under-utilised capacity. Africa has a total 77.8 MTPA Pipeline priority
(105.8 bcma) of liquefaction capacity, but its utilisation Piped exports are expected to remain the priority. Algeria
rate across all producers was just 54.4% last year, has three pipeline connections with Europe. TransMed
primarily reflecting upstream constraints. runs to Italy via Tunisia and has a nameplate capacity
Algeria exported 11.78 MT of LNG in 2021, despite of 32 bcma, of which just under 20 bcm was used last
hosting some 28.9 MTPA of liquefaction capacity, year. Medgaz flows to Spain and has undergone a recent
according to IGU data. This might suggest a major failure capacity expansion from 8 to 10.7 bcma. Algerian exports
of upstream supply, but Algerian gas production in fact to Spain last year via Medgaz totalled about 8 bcm out of
jumped by almost 25% in 2021 from 81.5 to a record a total of 15.8 bcma supplied by pipeline.
100.8 bcma.
Part of this was funnelled into higher LNG exports, The other volumes arrived via the 12 bcma Maghreb-
which rose from 10.58 to 11.78 MTPA, but the majority of Europe pipeline, which has not been used since
the surplus gas was used to increase pipeline exports to November last year, owing to diplomatic disputes
between

36 G LO B A L VO I C E O F G A S http://www.igu.org/news/global-voice-of-gas-3-vol-2/
OCTOBER 2022
 Africa LNG Exports (bcm)

700

600

500

400

300

200

100

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Nigeria Algeria Angola Egypt Other Africa

Source: BP

Rabat and Algiers. These have extended to Spanish/ new oil and gas discoveries this year across various oil
Algerian relations, as Madrid has recognised Morocco’s and gas basins.
autonomy plan for the disputed Western Sahara, which These include wells drilled in partnership, for example
Algeria opposes. However, gas exports to Spain are with Eni, which announced another oil and associated gas
not expected to be affected beyond the closure of the discovery in the Zemlet al Arbi concession in July.
Maghreb-Europe pipeline, which also supplies Morocco. Exploration success, supported by increased foreign
and domestic investment, has improved the outlook for
Algeria’s upstream prospects brighten Algeria’s gas production and there is certainly no shortage
Italy’s Eni and Algerian state oil and gas company of customers. If sustained, this should feed through into
Sonatrach struck a deal to increase pipeline supplies in higher LNG production in coming years. Algeria’s energy
April, one which is expected to utilise almost all the spare minister said in July that the country’s LNG exports could
capacity on the TransMed pipeline. Increased flows by reach 22 bcm this year, a modest, but still important
pipeline to Italy are likely to be offset by a small reduction increase for Europe in 2021, given also an expected rise
in exports to Spain. The ability to increase LNG output in Algerian pipeline exports to Italy.
thus depends on further rises in gas production beyond
that which will be directed to export pipelines. Feedstock problems limit NLNG
Algeria faces major upstream challenges largely as According to local reports, Nigeria LNG’s Train 7 is about
a result of production declines from old fields and the 30% complete. It has a targeted start-up date of 2024,
need to meet growing domestic demand. The giant Hassi but company officials have said 2025 is more realistic in
R’Mel field, which still accounts for about 50% of national the light of construction and engineering delays, which
production, is well past its peak and expected to enter occurred as a result of the COVID-19 pandemic.
end-of-life decline from around 2025. T7 will have a capacity of 8 MTPA and would increase
However, the recent government changes and high oil NLNG’s total capacity to 30.8 MTPA. However, Nigeria’s
and gas prices have prompted a significant improvement LNG production has suffered from upstream problems
in the country’s investment environment. In addition, which have limited the amount of gas reaching the facility.
record oil and gas revenues have increased the capital Nigerian LNG exports last year were 16.42 MT, or 74% of
available to Sonatrach. capacity. NLNG receives gas from joint ventures covering
Indeed, the Algerian upstream appears to be on various concession areas, both on and offshore. The
something of a roll. Sonatrach announced a major gas company said in August that it had lost $7bn in revenue
condensate discovery at Hassi R’Mel in June, which is this year alone as a result of gas shortages. NLNG officials
expected to result in an additional 3.65 bcma of gas from put utilisation this year at 68%.
November. The company has announced a number of The problem – a persistent one – is outages on the

37 G LO B A L VO I C E O F G A S http://www.igu.org/news/global-voice-of-gas-3-vol-2/ O C TO B E R 2 0 2 2
 plant’s feeder pipelines, often the result of sabotage. The gas pipeline linking the western and eastern systems runs
Trans-Niger pipeline, for example, has not operated since along Libya’s Mediterranean coast. However, the Marsa
March. The pipelines are not controlled by NLNG and the El Brega terminal, built in 1970, was already in need
company can do little to ensure their security amid oil of major renovation prior to the onset of conflict in the
thefts which have reached unprecedented levels, affecting country in 2011.
associated gas supply, according to the authorities. Egypt offers more promise, particularly given imports
Any increase in Nigeria’s LNG exports is largely of Israeli gas to boost domestic supply. Egyptian gas
dependent on improved security for its onshore feeder output, like Algeria, last year saw a large jump from
pipelines, but a lack of security has plagued the Nigerian 58.5 bcm in 2020 to 67.8 bcm. Gas consumption also
oil and gas sector for decades and it is not clear that increased last year by 3.6 bcm, but the surplus for export
action adequate to address the problem will be taken. increased substantially.
Egypt exported 6.56 MT LNG last year, a significant
Egypt and Libya increase on the 1.34 MT exported in 2020, but has a total
Upstream issues are also central to the fortunes of North liquefaction capacity of 12.2 MT, leaving plenty of room
Africa’s other two LNG producers. for further increases, if the feedstock gas is available.
Libya’s 3.2-MTPA Marsa El Brega LNG plant has not However, shortfalls in supply continue to hamper
operated since 2011 and continued instability and conflict operations. The Idku plant was reported to be idle in
in the country suggest its prospects for rejuvenation look July and working at only very low capacity in June, while
limited. Available gas will almost certainly be used to Damietta was reported to be working at about two-thirds
boost pipeline exports to Italy via the currently under- capacity.
used Greenstream pipeline. Libyan gas exports to Italy Domestic gas supply and, more recently, regional
last year amounted to 3.1 bcm versus transmission exports have been prioritised over LNG exports, but
capacity of 8bn m3. bumper prices on the European gas market appear to be
Greenstream is fed from the country’s western oil changing Cairo’s focus. According to consultants Rystad
and gas system, including the Bahr Essalam offshore Energy, a government plan to reduce electricity demand
field and the Bouri and Wafa fields. Marsa El Brega is could result in gas savings of 16 mcmd, freeing up gas
supplied from oil and gas fields in the east, although a for export as LNG. Reports suggest that the country is

LNG Capacity at the en of April 2022 and Exports in 2021 (MTPA)

Egypt

Cameroon

Angola

Equitorial Guinea

Nigeria

Algeria

Libya

0 10 20 30 40 50 60 70 80

Utilisation (%) Exports Capacity

Source: IGU

38 G LO B A L VO I C E O F G A S http://www.igu.org/news/global-voice-of-gas-3-vol-2/ OCTOBER 2022

North African pipelines to Europe

Capacity Start Length

From To Via Status
(bn m3/yr) Year (km)

Transmed Algeria Sicily Tunisia Operational 32 1982 2,475

Magreb-Europe Algeria Spain/Portugal Morocco Offline 12 1996 1,620

Medgaz Algeria Spain Operational 10.7 2011 210

Arab Gas Pipeline Egypt Jordan/Syria/Lebanon Operational 10 2003 1,200

Greenstream Libya Sicily Operational 11 2004 520

switching some power plants to burn fuel oil in the effort this model could be replicated by the Mozambique LNG
to support LNG exports. partners, if the onshore situation fails to improve. Eni is
expected to make a decision on a second FLNG vessel
East Africa gains momentum early next year, which could be onstream in as little as
The prospects for new LNG from Sub-Saharan Africa four years, according to the company.
vary considerably in terms of both timing and scale. No final investment decision (FID) was ever taken on
Plans for two large onshore LNG facilities in Mozambique the second proposed major onshore LNG development,
continue to be frustrated by the security situation in Rovuma LNG, which was supposed to be the means by
the north of the country. The TotalEnergies-led 12.88- which most of Area 4’s gas resources were monetised.
MTPA Mozambique LNG project was forced to suspend How a second FLNG project would affect its prospects
construction in March last year, following an attack by remains uncertain.
militants on the town of Palma in Cabo Delgado province, Eni holds a 40% share in the Mozambique Rovuma
where the project is located. Venture (MRV), along with ExxonMobil (40%) and China’s
According to a statement made in August by one of the CNPC (20%). MRV owns a 70% interest in the Area 4
minority stakeholders, India’s BPCL, building activities exploration and production concession while Portugal’s
could restart in the first half of next year. All going well, Galp, South Korea’s KOGAS and Mozambique’s Empresa
which recent history suggests is not given, the plant could Nacional de Hidrocarbonetos each hold 10%.
be up and running in the late 2020s. Meanwhile, to the north, Tanzania continues to move
However, Eni’s plans for a second FLNG vessel forward with its LNG plans, which have progressed
to complement its Coral Sul project suggest that more slowly than those in its southern neighbour. As in
Mozambique’s LNG development may be taking a new Algeria, a change of government has resulted in a more
course. The Area 2 partners invested in the Eni-led accommodative approach to foreign investment. The
3.4-MTPA Coral Sul project as a means of fast-track government has still to formulate a Host Government
development, recognising the length of time it would take Agreement (HGA), which is expected later this year,
to build the country’s first LNG plants onshore. Coral Sul but it signed an LNG framework agreement with major
is expected to be on-stream by the end of this year. concession holders Shell and Equinor in June.
The hold-ups onshore have vindicated the strategy Front-end engineering and design work is to be
and moving ahead with another floater could signal a shift completed within three years of the HGA and the
to modular offshore development of the Area 4 resources, companies are targeting an FID in 2025, suggesting that
insulated from the onshore security problems. Indeed, the proposed major onshore facility could start producing

39 G LO B A L VO I C E O F G A S http://www.igu.org/news/global-voice-of-gas-3-vol-2/ O C TO B E R 2 0 2 2
African LNG capacity (MTPA)

Libya Marsa El Brega T1-4* 1970 3.2 Onshore

Algeria Arzew GL1Z T1-6 1978 7.9 Onshore

a capacity of 2.5 MTPA, but the project is designed to be
Algeria Arzew GL2Z T1-6 1981 8.4 Onshore
modular and up to four FLNG vessels are possible, raising
Nigeria NLNG T1-2 1999 6.6 Onshore capacity to 10 MTPA.
As the project moves to operational status, the key
Nigeria NLNG T3 2002 3.3 Onshore
question is whether a second vessel receives sanction
Nigeria NLNG T4 2005 4.1 Onshore
in what is a very different gas market to only two years
Egypt Damietta LNG T1 2005 5.0 Onshore ago, when the project partners scaled down their initial
Egypt Egyptian LNG (Idku) T1-2 2005 7.2 Onshore ambitions in the face of the COVID-19 pandemic. With
much of the necessary infrastructure for expansion
Nigeria NLNG T5 2006 4.1 Onshore
already in place, the lead time for subsequent phases
Nigeria NLNG T6 2007 4.1 Onshore
should be substantially shorter than for Phase 1. Market
Equatorial Guinea EG LNG 1 2007 3.7 Onshore conditions arguably support a full-steam-ahead approach
Algeria Skikda GL1K T1 (rebuild) 2013 4.5 Onshore
to maximise production from the project as early as
possible.
Angola Angola LNG T1 2013 5.2 Onshore
Meanwhile, incremental gains are expected from
Algeria Arzew GL3Z (Gassi Touil) T1 2014 4.7 Onshore
Africa’s only producing FLNG vessel off Cameroon. So
Cameroon Cameroon FLNG 2018 2.4 Floating far, the Hilli Episeyo has been operating at 50% of its
capacity of 2.4 MTPA, but this is expected to rise by
200,000 T this year and a further 400,000 T in 2023 as
UNDER CONSTRUCTION
development drilling increases gas supply.
Mozambique Coral-Sul FLNG 2022 3.4 Floating Another potentially fast-track development is Eni’s
Mauritania Tortue/Ahmeyim FLNG T1 2023 2.5 Floating plans for FLNG off Congo-Brazzaville, although again
the scale is relatively modest. Nonetheless, initial plans
Nigeria NLNG T7 2024 8 Onshore
for 1.5 MTPA have been doubled to 3.0 MTPA, possibly
Mozambique Mozambique LNG (Area 1) T1-2 2025 12.88 Onshore
in two phases. Although a more marginal source of
gas supply in terms of proved reserves than the large
resources off East Africa, Congo appears to have sufficient
around 2030. Equinor estimates reserves on its Block 2 gas to support a facility of the size envisaged by Eni.
acreage at around 566bn m3, while Shell has discovered The possibility of quick development is certainly
453bn m3 on Blocks 1 and 3. attractive as Italy attempts to make do without Russian
gas imports. Eni signed a head of agreement in February
West Africa with New Fortress Energy (NFE) to deploy its first ‘Fast
A decision by Eni and BP to merge their Angolan LNG’ unit off Congo-Brazzaville.
businesses into the Azule Energy joint venture should The Fast LNG concept uses jack-up rigs or other
prove positive for Angola LNG. BP joins Eni in the New floating infrastructure to house midsize liquefaction trains.
Gas Consortium, which took an FID on the development NFE estimates it will be able to produce LNG for between
of Angola’s first non-associated gas development, $3-4 per mmBtu and, more importantly, have the FLNG
Quiluma and Maboqueiro, in July. First gas from the facility in place 20 months from FID. NFE also reached a
project is expected in 2026 and will feed into the existing memorandum of agreement in December last year with
5.2-MTPA Angola LNG facility, which last year operated the government of Mauritania for an energy hub, which
at about 70% of capacity and currently depends solely on would incorporate a Fast LNG unit.
associated gas for its feedstock. Africa’s existing LNG producers and FLNG look the
However, NLNG’s T7 aside, it is FLNG, as in East most promising points of delivery for new LNG supply
Africa, that looks the most likely source of new LNG in the short term, but the construction of large-scale
on the West African Coast. The BP-led Greater Tortue onshore facilities will be slower to arrive. Nonetheless,
Ahmeyim LNG project is close to completion and could incremental gains and new projects in Africa should still
start up this year. The first phase is relatively small with provide a much-needed boost to global LNG supply.

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