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As hydrocarbons prices have pushed upwards after their slump, a degree of future planning has returned to the global gas market. New liquefied natural gas (LNG) export projects are in prospect, led by Australia and the United States, but with a few schemes in Africa. In Mozambique’s Rovuma Basin, a final investment decision (FID) on Coral LNG, led by Eni and ExxonMobil, is expected by end-2017, for exports to Asia from the early/mid-2020s. As the industry builds up, Mozambique expects a big domestic dividend, with the Rovuma Basin also supplying domestic gas-to-power (GTP) projects.

Some other new offshore gas producers have sought to promote big-ticket industrial schemes – Ghana’s gas plans have chopped and changed as different factions push different projects – but the defining trend across Africa is to promote GTP. Shifts in the global gas market, including the US shale revolution and technological innovation, mean spot sales have come to take a percentage of the market that seemed highly unlikely only a few years ago. In a continent where population centres are often clustered along coastlines, the installation of a floating storage and regasification unit (FSRU) to supply combined-cycle plants is in vogue. The number of projects now being planned is shown on the map on page 21.

Africa’s west coast has been one focus for these projects, but discussion at the early April Africa Investment Exchange: Gas meeting in London revealed floating import schemes for GTP at various stages of development around the continent. Even Mozambique is mooting LNG imports at Matola to supply GTP facilities in Maputo; this reflects the lack of infrastructure linking the gas-rich north and populous south, and would serve as a stopgap before Rovuma Basin gas can be transported south (by pipeline or FSRU) for domestic consumption.

Where markets can be secured, new gas reserves will be exported. FID for Equatorial Guinea’s Fortuna development is expected by mid-2017, executives say – a decade after the discovery. Equatorial Guinea “understands LNG”, an executive said; it has no GTP or other commitment for the gas (a proposal to supply a new petrochemicals plant has not proven feasible). The profile of potential customers for Fortuna gas is changing. FLNG is “a big unlocker”, the executive commented.

The business model developed by companies including Golar – which is involved in two of Ghana’s proposed three FSRU projects – is gaining momentum. In the past year, intra-African sales via FSRUs (supplying LNG or liquefied petroleum gas) have quickly risen up the agenda.

But there are complications which industry professionals fear will limit African projects when compared to FLNG developments in other regions. Selling into fragile economies raises questions of government risk, for deals involving insolvent parastatals that may still need sovereign guarantees to underpin financing. Another all too common sub-Saharan problem is highlighted by a consultant who says “LNG imports are not talking to existing infrastructure” – landing the gas can be the easy bit in markets which have to build power plants and transmission facilities from scratch.

The chief executive of an upstream company believes a steady increase in gas prices could be a timebomb for fragile economies. This problem is amplified by the well-documented lack of commercial tariffs in many economies. As an African industry banker puts it: “Not all announced LNG plants will be built. Securing sales contracts and [ensuring] low-cost construction and/or [lower] upstream costs needs to be a priority for all greenfield projects.” But in a market where a substantial number of project developers are looking to buy into the continent’s fast-rising demand for GTP – including established developers and newcomers who include potential investors from private equity, publicly quoted companies and other asset classes – the direction of travel is clear for now: a significant number of projects involving FRSU solutions will emerge in the year ahead.