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Africa could become the next market for growing U.S. exports of liquefied natural gas, Energy Secretary Rick Perry told media at the Africa Oil Week in Cape Town. The official discussed LNG exports with a number of African government officials, including ones from Nigeria, the Ivory Coast, and South Africa.
“We talked about a lot of opportunities -- LNG, coal, but it all goes to the issue of power and power being able to be delivered into places that don’t take electricity for granted," Perry said.
As many as six hundred million people in Africa lack direct access to electricity, which is what many these new exports will go towards generating. South Africa already has plans in place to buy LNG from Cheniere Energy, and other LNG producers are preparing to bid in tenders in Africa. Still others—including Exxon—are interested in developing the continent’s own natural gas resources.
Indeed, Africa’s gas market is still nascent, but it has substantial growth potential thanks, above all, to the fast growth in electricity demand and the fact that as a power generation fuel, natural gas and LNG are significantly cheaper than oil. For now, this market is the fastest-growing in the world.
There are plans to increase Africa’s power generation to 30 GW by 2030, which would mean an additional consumption of 42 million tons of LNG annually. This sharp increase in LNG shipments as well as the launch of local projects would create the need for a gas pricing index, two government officials from the continent told Reuters at the Africa Oil Week.
Africa already has some big LNG exporters, including top oil producers Angola and Nigeria, but also Equatorial Guinea and, from this year, Cameroon. LNG projects are planned in four more African countries, including Tanzania, Mozambique, Senegal, and Congo Republic.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.