Nick Prowse, Lizel Oberholzer, Penny Cygan-Jones, and Bethan Walters, Norton Rose Fulbright, provide an update on the latest accomplishments of the African LNG industry.
With an abundance of natural gas reserves and a growing demand for energy, Africa continues to play a leading role in the global LNG and broader natural gas industry, both in terms of supply and potential future markets. As the world struggles to limit the spread of the SARS-CoV-2 coronavirus and overcome the related adverse economic consequences, it is important to pause and acknowledge the latest achievements of the African LNG industry. These include some impressive achievements, especially considering the current challenging times.
African LNG exports
In 2019, with global liquefaction capacity rising to 430.5 million tpy, LNG exports from Africa constituted approximately 12% of global LNG exports, broadly supplied as follows:
- Algeria: 12.2 million t.
- Angola: 4.4 million t.
- Cameroon: 1.3 million t.
- Egypt: 3.5 million t.
- Equatorial Guinea: 2.8 million t.
- Nigeria: 20.8 million t.
Plans are underway to expand Africa’s LNG production and to monetise some of the significant natural gas discoveries which have been made, including in West Africa (Nigeria, Senegal, Mauritania, and Equatorial Guinea), East Africa (Mozambique and Tanzania), and North Africa (Algeria and Egypt). Some of the significant gas discoveries, such as those in South Africa, will of course be more likely to supply domestic gas markets as pipeline gas, rather than being liquefied and sold as LNG. Highlighted next are some of the major African LNG projects and milestones which have been achieved.
In 2019, LNG exports from Nigeria represented approximately 6% of global LNG exports, a testament to the long-standing success of Nigeria LNG Limited (NLNG), the world’s fifth largest global LNG supplier. NLNG has exported and safely delivered over 4500 LNG cargoes in the past 20 years, and is now set for further growth with the development of the 8 million tpy Train 7 project.
According to recent reports, NLNG signed a US$3 billion corporate financing on 13 May 2020 for the Train 7 project. This is the largest financing in Africa so far in 2020. The financiers include the Export-Import Bank of Korea (KEXIM), Korea Trade Insurance Corporation (KSURE), SACE, African Export-Import Bank, Africa Finance Corporation, 10 Nigerian commercial banks, and over 16 international commercial banks. Also on 13 May 2020, Saipem reported that NLNG had awarded EPC contracts with a value exceeding US$4 billion for the Train 7 project to its joint venture with Daewoo E&C Co. Ltd and Chiyoda Corporation. These outstanding achievements in the current market followed the successful signing of long-term LNG sale and purchase agreements with many of the world’s leading LNG players, setting strong foundations for the Train 7 project to proceed. Start-up of Train 7 is expected to occur in 2024, at which point it will increase NLNG’s production capacity by 35%, from its current capacity of 22.5 million tpy to over 30 million tpy.
This is an abridged version of an article that was originally published in the July 2020 issue of LNG Industry. The full version can be read here.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/29072020/amazing-achievements-during-turbulent-times/
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