October 27, 2022

Natural Gas In Africa Amid A Low-Carbon Energy Transition

Nigeria, Egypt, Algeria, Equatorial Guinea, and Angola are already established gas producers, serving global and, in some cases, domestic markets. Others, including South Africa, Namibia Senegal, Mozambique, and Tanzania are classed as emergent producers, potentially seeking to grow their gas industries. The war in the Ukraine has contributed to supply constraints and price hikes on global markets. This presents a potential opportunity for African countries to fill the demand gap, providing them with revenue that could help support development efforts.

However, there is a risk that any new investments in infrastructure are stranded when markets stabilize. Furthermore, looking ahead, finance for fossil infrastructure investment will be constrained, and the potential for stranded assets is high, particularly if there is concerted global action to achieve a net-zero world. Both existing and emergent producers need to consider both short- and long- term risks before investing in new gas infrastructure, regardless of whether it is to serve export or domestic supply markets.

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