Page 6 - AfrElec Week 30

AfrElec COMMENTARY AfrElec
Bringing in gas
Benin and South Africa are working on LNG import plans
AFRICA
WHAT:
LNG supplies are seen as crucial to securing future power generation.
WHY:
Gas is currently cheap and deliveries can be arranged fairly easily.
WHAT NEXT:
Private investment
in import capacity provides companies with guaranteed markets, but state support is essential.
GAS demand in Africa is on the rise, with a num- ber of projects considering availing themselves of the lower cost of LNG deliveries. France’s Total announced a host government agreement last week on developing an LNG import terminal for Benin. South Africa’s Transnet also set out plans for a study of LNG imports at the Port of Richards Bay, signing up support from the Inter- national Finance Corp. (IFC).
e cost of LNG makes such supplies attrac- tive – for now – in part as a result of a deepening of the market, through the increased take-up of oating storage and regasi cation units (FSRUs). Such facilities can be deployed at short notice and with a relatively low upfront cost, although scope for expansion is limited.
Benin
Total set out its plans for an FSRU o shore Benin in a statement on July 24. e company would execute the FSRU plan and supply up to 500,000 tonnes per year (tpy) for 15 years, it said, starting in 2021. In addition to developing and operating the FSRU, Total would also provide a pipeline connection to power facilities at Maria Gléta.
“ is project is in line with Total’s strategy to develop new gas markets by unlocking access to LNG for fast-growing economies. We are very pleased to have been entrusted by the Benin authorities to develop LNG imports and support a broad adoption of natural gas in the country,” said the company’s senior vice president for gas, Laurent Vivier. Adding LNG to Benin’s energy
mix would reduce its carbon intensity, he said. Benin Minister of Energy Dona Jean-Claude Houssou said that revitalising the energy sector was at the heart of the government’s plans. “I would like to highlight the government’s e orts to restore Benin’s energy independence, which is the foundation of the country’s ambitious economic and social development.” Plans are focused on helping private investment in the
sector.
“ e gas import project will supply plants in
Benin, such as the new 127-MW power station at Maria Gléta, with imported [LNG] on preferen- tial terms and will position Benin, capital of the WAPP (West African Power Pool), as the cross- roads for gas and electricity in the sub-region.”
Total is focused on ramping up its LNG pres- ence. It sold 21.8mn tonnes of LNG in 2018 and intends to expand its portfolio to around 40mn tpy by 2020. It is well on its way, with sales of 16.2mn tonnes in the rst half of 2019. Histor- ically, the world’s super-majors have tended to focus on LNG production, while overlooking the consumption and power aspects. This is changing. Companies such as Total have come to see the ability to be involved in all steps of the process as a way of cutting costs and securing the steady ow of output.
e move into the gas sector does not come without risks, though. As Total acknowledged in its second-quarter results, released on July 25, natural gas prices in Europe and Asia were down 36% and 26% year on year respectively. In order
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w w w . N E W S B A S E . c o m Week 30 31•July•2019