1. Introduction

The ongoing conflict between Russia and Ukraine has opened up opportunities for African gas-producing countries to market their products in Europe to fill the gap created by the absence of Russian supply. European gas prices have increased by more than three times over the past 12 months. And since the start of the conflict, the European Commission has announced a plan to make Europe independent of Russian fossil fuels before 2030 through a combination of acceleration of renewable energy and diversification of natural gas supplies, thus creating market opportunities for African gas in the European Union. This could result in increased demand for oil and gas from the African countries that have the reserves and infrastructure in place to help meet that demand.  The increased demand for African gas could potentially be met through investment in gas-export infrastructure such as LNG export terminals or continental gas pipeline projects to deliver African natural gas to European and other global customers.

2. African Gas Resources

According to S&P Global Platts, nearly 40% of global new gas discoveries in the last decade were in Africa, mainly in Senegal, Mauritania, Mozambique and Tanzania, with 17 countries already producing gas with seven net exporters and seven net importers, according to the African Energy Commission.  Of interest is Africa’s more than 630 trillion cubic feet of proven natural gas reserves that the European Union would seek to integrate into its energy mix. 

However, Vijaya Ramachandran, the director for energy and development at the Breakthrough Institute in Berkeley, California, was of the view that while Africa has enough gas reserves, building gas pipelines from Africa to Europe will be challenging.  But the investment is worthwhile, both from an economic and a geopolitical perspective. Nigeria is enthusiastic about exporting gas to Algeria, which can then be exported to Europe.  She stated further that an enormous new gas fields in Senegal and Mauritania could place the countries amongst Africa’s top gas producers when it comes online in 2023,” she said.  The proximity of this field to Europe will be an advantage for both countries. Floating plants that can directly transport liquefied natural gas (LNG) to Europe will also be advantageous for sub-Saharan African producers, especially if Germany and other European countries invest in LNG terminals to regassify liquid fuels.

African LNG exports have predominantly come from Nigeria and Algeria, with smaller volumes from Egypt, Angola and a fraction from Equatorial Guinea. In addition, large-scale discoveries offshore in Mozambique, Tanzania, Senegal, Mauritania, and South Africa have the potential to yield additional natural gas exports once developed.

3. Opportunity for African Gas in European Market.

The current high dependence of Germany and many other European countries on Russian natural gas is making the continent to seek the diversification of gas supply sources to mitigate the effect of disruptions to gas supply by Russia.  Thus, European politicians have recently intensified the search for new sources of supply, especially in connection with liquefied natural gas (LNG). The destinations of government members for this were mainly LNG supplier countries such as the UAE, the USA and Qatar. These destinations may make a stronger contribution to energy security in the future, but Africa is a top consideration on this gas supply diversification drive by the European countries.

While Africa’s competitive advantage in short-term procurement over other LNG exporters lies primarily in its geographical proximity to Europe and lower transport costs, Africa offers an even more additional advantage in medium-term procurement in terms of the restrained investments in gas production on the African continent in recent years now offer the possibility of using free capacities in already existing liquefaction plants to generate additional volumes. Europe could contractually secure these volumes for the long term by acting quickly and with determination.

Italy, whose 45% of gas imports came from Russia before the conflict began, was the first to seek diversification of its supply sources. Four days after the start of the Russian offensive, its head of diplomacy, Luigi Di Maio, was in Algeria, “which has always been a reliable supplier,” in his words. On April 11, Italian Prime Minister Mario Draghi and ENI CEO Claudio Descalzi followed suit, signing an agreement with Algerian President Abdelmadjid Tebboune to increase imports of Algerian gas by about 40%. In the same breath, Rome was doing likewise in Angola and in the Republic of Congo.  According to Rystad, African nations that have historically been gas suppliers to Europe are well placed to scale up their exports. Africa’s advantage is that it already has existing pipelines connected with the wider European gas grid.

Current pipeline exports from Africa to Europe run through Algeria into Spain and from Libya into Italy. Talks of long-distance pipelines connecting gas fields in Southern Nigeria to Algeria via the onshore Trans Saharan Gas Pipeline (TSGP) and the offshore Nigeria Morocco Gas Pipeline (NMGP) have picked up in recent months.

While the TSGP aims to utilize existing pipelines from Algeria to tap into European markets, NMGP aims to extend the existing West Africa Gas Pipeline (WAGP) all the way to Europe via West African coastal nations and Morocco.  In contrast, in other producing countries, liquefaction plants and sometimes gas fields usually have to be newly developed in order to produce new volumes of LNG. This takes significantly longer and while new construction projects can be expected to take eight to ten years before the first gas deliveries, the expansion of gas production in Nigeria or Equatorial Guinea (or the expansion of pipeline infrastructure between these two countries) could make the first additional gas volumes possible in around two years.

Illustrating the opportunities for African gas in European market, Mr Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Company (NNPC), recently revealed that Nigeria has so far earned over $1bn from Portugal through the sale of natural gas in 2022 alone. He added that there are ample opportunities to grow energy supply to Portugal, saying Nigeria has invested in critical infrastructure to ensure domestic gas availability & increase gas supply to the international market and highlighted the age-long energy partnership between the two countries, stressing that Nigeria supplies 70 percent of energy imports to the European nation.

A strong political European-African energy partnership would have the chance to secure significant additional LNG volumes for Europe in the long term. However, such an energy partnership should by no means concentrate on development aid, advisory services, and joint committees, as it has often been the case so far, but should rather pursue the goal of agreeing on binding LNG supplies as quickly as possible and launching the necessary private and public investments in Africa.

4. Conclusion

In conclusion, Europe is now considering how gas-rich African nations can be helped to scale up production and exports in the years to come. The European Union’s decision earlier this year that all natural gas investments are equivalent to investments in “green” energy signals that African gas is considered sustainable. No doubt, Europe’s move away from Russian gas provides a ready and lucrative market for a vast project being developed in Africa.  As Russia has reduced gas supplies to Europe and Europe seeks to limit its dependence on Russian gas, Africa has an opportunity to fill the gap, but it needs to act now before a longer-term shift to low carbon energy limits the West’s appetite for fossil fuel.