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Africa may be on its way to becoming the new destination for liquified natural gas. A new liquified gas field near Senegal and Mauritania’s coastlines is bringing hope to Europe to supplement its huge energy needs
Africa may be on its way to becoming the new destination for liquified natural gas. A new liquified gas field near Senegal and Mauritania’s coastlines is bringing hope to Europe to supplement its huge energy needs. The field could produce up to 10 million tonnes of liquefied natural gas per year.
The largest oil and natural gas discoveries in recent history occurred between 2014 and 2017. A conservative estimate puts that more than 1 billion barrels of oil and 40,000 billion cubic feet of natural gas await extraction, re-invigorating interest in the Senegal-Mauritanian basin. Yet, how to turn the mind-boggling hydrocarbon wealth into a significant production hub is still evolving.
Previous attempts to monetize smaller finds were not successful. Production levels at regional facilities have declined over the last decade. While Senegal’s consistently low-volume Gadiaga project remains in operation, Mauritania’s Deepwater Chinguetti project, production ceased altogether at the close of 2017.
The two countries are forging partnerships to exploit these new reserves since they cross international boundaries. In 2018 when the two countries agreed to the terms of the Inter-State Cooperation Agreement that delineated equal shares of offshore resources.
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However, a lack of existing infrastructure means that developing these projects will require serious investment from committed partners. Mauritania needs to find a substitute for its iron mining business, which has contributed substantially to provide for a sizable portion of the national economy but is subject to the ebb and flow of demand from key customer China. The country is expecting that the fiscal gap could be filled with proceeds from liquefied natural gas (LNG) produced from Mauritania’s fields. There is a question mark of how soon that can be tapped to reap the benefits from the opportunities that are unfolding in the wake of the Russia-Ukraine tip-off. The global LNG needs are expected to peak in 2023.
