Africa starts year with a small LNG offering for the world [Global Gas Perspectives]

UK oil major BP launched first gas earlier this month from wells at the Greater Tortue Ahmeyim (GTA) Phase 1 LNG project offshore Mauritania and Senegal – one of Africa’s most complex deepwater gas developments.

This milestone has been a long-time coming. Originally, first gas was expected in 2022, but launch was delayed repeatedly, chiefly because complications caused by the COVID-19 pandemic, but also a now-resolved dispute between BP and the suppliers of the project’s floating LNG plant. These setbacks also led inevitably to cost overruns. The vessel had taken three and a half years to complete, despite representing a conversion from a 1970s-built Moss-type LNG carrier rather than a newbuild. It finally arrived on-site a year ago.

A number of other African LNG developments have faced similar difficulties over the past few years. And in spite of more than three years of soaring global gas prices, final investment decisions (FIDs) on new capacity have been few and far between. As a result, despite its substantial LNG export potential, Africa has mostly missed out on the significant opportunity that the global energy crisis presented to accelerate development.

GTA’s source fields are situated 120 km offshore in waters some 2,850 metres deep. From there, gas is piped to a floating production storage offloading (FPSO) unit some 40 km from the shore, where gas is processed and liquids separated, and gas is then delivered to the FLNG 10 km offshore.

The deep waters are not the only technical challenge that the project faced. The multilayered gas reservoirs pose a substantial risk of perched water and aquifer presence, and the issue is made worse by limited data from appraisal wells, which did not fully penetrate all reservoir zones. BP and its partners also encountered higher-than-expected flow rates from the first wells they drilled, requiring adjustments in completion designs. Well cleanup operations were also made more difficult by wellbore pressure differentials, and the companies had to devise a strategy to deal with hydrates within some of the zones.

Once fully up and running, GTA Phase 1 is set to produce around 2.3mn t/yr of LNG. Declared as “a project of strategic national importance” by both the governments of Senegal and Mauritania, its launch marks an early step towards establishing a new hub for LNG production in West Africa. Planning for a second phase, which could add a further 2.5-3.0mn t/yr of output, is ongoing, but an FID is still pending.

Beyond the billions of dollars the project will earn over its more than 20-year lifespan, construction created more than 3,000 local jobs and involved 300 local companies from Mauritania and Senegal, according to BP. The project partners also invested in workforce development and other social investment programmes. Furthermore, some of the gas extracted will be made available for local use in both countries.

BP operates the project with a 56% stake, while US independent Kosmos Energy has 27% and the national oil companies of Mauritania and Senegal, Société Mauritanienne des Hydrocarbures and Petrosen, have shares of 10% and 7% respectively.

Few other additions

Africa has seen few other LNG project launches in recent years. Italy’s Eni brought on stream the 3.4mn t/yr Coral Sul FLNG in Mozambique in 2022. The TotalEnergies-led 13mn t/yr Mozambique LNG project, sanctioned in 2019, was originally meant to start up last year, but work has been on hold since 2021, when extremist militant groups carried out a series of attacks near the construction site. The security situation on the ground has improved, but construction is yet to restart. TotalEnergies CEO Patrick Pouyanne said last October he was hopeful that production could be launched in 2029, or five years later than originally scheduled.

As part of its Marine XII Fast LNG Project in Congo, Eni started up the 0.6mn t/yr Tango FLNG in December 2023, and plans to follow this up with the launch of the 2.4mn t/yr Nguya FLNG by the end of this year. Beyond greenfield developments, Chevron completed the Sanha Lean Gas Connection project in December 2024, which will help maintain export levels at the Angola LNG terminal.

Looking ahead, no new launches are anticipated in the near term. The NLNG expansion project in Nigeria, involving the addition of a seventh train and bottlenecking work to boost liquefaction capacity by 7.6mn t/yr, was expected to be completed by 2024. But various delays mean that goal will not be reached until 2026 or potentially later.

Scant FIDs

While FIDs have taken on a record amount of new liquefaction capacity globally over the last few years, this trend has overlooked Africa. There were hopes that ExxonMobil might take an FID on the 18mn t/yr Rovuma LNG project in Mozambique, but because of the aforementioned security issues, the US major said last November it did not anticipate taking this step until 2026, which would push its launch to the early 2030s.

Nigeria’s UTM Offshore Ltd. has been working for several years towards an FID on an FLNG with a capacity of 2.8mn t/yr. But the target keeps getting postponed. The country’s national oil company NNPC is likewise hoping to sanction a 2.7mn t/yr FLNG this year. 

Long-discussed plans like the 10mn t/yr Tanzania LNG project seem an even more distant prospect. Negotiations between the developers Shell and Equinor and the government have dragged on for years, during which time the estimated budget has ballooned to $42bn.

The operational and political risks at play in Africa explain why other, safer jurisdictions with ample gas reserves with more secure rules governing investment and more developed infrastructure and supply chains have been better positioned to capitalise on the gas supply crunch seen since late 2021. Those African projects that have proceeded without too much difficulty have been small, therefore carrying less risk, while larger ones have stumbled.

This is unfortunate, because the world’s worst energy crisis in decades may have offered a unique opportunity for major African projects to get moving, with huge economic benefits up for grabs. With the market now on the verge of receiving a wave of fresh supply from Qatar and the US, that opportunity is now passing.