EU Looking To Meet Demand With New Projects In Africa

EU Looking To Meet Demand With New Projects In Africa
Following the Russia-Ukraine crisis and supply disruptions, the EU has emphasized the viability of Africa's reserves to meet European demand.

The European Union (EU) is moving ahead with plans to enhance Africa-EU supply chains. Following the Russia-Ukraine crisis and supply disruptions, the bloc has emphasized the viability of Africa's reserves to meet European demand.

Despite Africa’s position as the ideal partner for the EU, the continent needs its gas resources domestically before they can be utilized internationally. Therefore, a mutually beneficial partnership is necessary, one in which EU member countries scale up investment in African gas.

In April 2022, Eni signed an agreement with Algeria’s Sonatrach whereby the two corporations will increase cooperation on gas development while leveraging the TransMed/Enrico Mattei pipeline to export up to 9 billion cubic meters (bcm) of LNG to Europe. In the same month, Eni also signed a deal with Egypt’s EGAS for the two to jointly conduct exploration activities to increase the country’s gas reserves in existing blocks while targeting new acreage in the Nile Delta, Eastern Mediterranean, and Western Desert regions.

The deal will also see Egypt expanding gas exports to Europe to 3 bcm of LNG from 2022. Meanwhile, in Angola, a declaration of intent for increased cooperation on gas exploration, production, and trading was also signed in the same month.

Meanwhile, backed by significant gas resources, emerging markets across the continent have also been identified as potential partners for the EU.

Countries such as Mauritania, Senegal, Ghana, Mozambique, Equatorial Guinea, and Tanzania could tap into international markets, ramping up LNG exports as soon as large-scale projects come online. Projects such as Mozambique’s 3.4 mtpa Coral FLNG, Equatorial Guinea’s 2.5 mtpa Fortuna FLNG, and Senegal’s 10 mtpa Yakaar-Teranga LNG hub will be key for addressing regional and international demand.

The European Commission is expected to kickstart official communications with gas producing countries from Africa and other regions in late May 2022, under efforts to expand energy imports by 50 bcm of LNG and by 10 bcm of pipeline gas to reduce the reliance on Russian energy by two-thirds by the end of 2022, Africa, with its vast gas resources is well positioned to be Europe’s main supplier.

However, despite the potential of Africa’s gas in meeting EU demand, the continent needs to prioritize domestic utilization first. With over 600 million without access to electricity, expanding regional gas trade will be pivotal in kickstarting socioeconomic growth and energy access.

In this regard, the African Energy Chamber (AEC) called for increased cooperation between Europe and Africa in developing an African gas market, scaling up Africa-directed investment across the entire gas value chain.

Projects such as the TotalEnergies-led 12.8 mtpa Mozambique LNG project, Mauritania’s 13 trillion cubic feet BirAllah project, and the $13 billion Trans-Saharan Gas Pipeline all need to be fast-tracked according to the AEC, with financial and technical aid from Europe improved, as they will play a vital role in enabling Africa to exploit its 620 trillion cubic feet of gas reserves to make energy poverty history.

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