Yemisi Izuora
Global Liquified Natural Gas (LNG) solutions provider Lloyds Energy said it is evaluating several investment opportunities in LNG, floating storage and regasification units (FSRUs), and downstream gas infrastructure across high-growth markets.
Lloyds’ interest comes as the development of Africa’s regasification capacity remains incomplete.
For nearly a decade, several African countries have announced plans for LNG import terminals intended to supply power plants or industrial users. Few of those projects are fully operational today.
To meet its electricity needs, Benin signed an agreement with TotalEnergies in 2019 to develop a floating LNG import and regasification terminal with annual capacity of 500,000 tonnes. The facility was expected to supply the Maria Gléta thermal power plant and help the country reduce its dependence on fuel oil while positioning itself as a regional gas hub. Since the announcement, however, no major public update has been provided on the project.
Côte d’Ivoire is also among the early adopters of this strategy. In 2017, the CI-GNL consortium, which includes Total, SOCAR, Shell, Petroci, Golar LNG and CI Energies, announced plans for a regasification terminal at Vridi.
Originally expected to come online in 2018, the project has since seen few public updates regarding its progress.
Equatorial Guinea also unveiled plans in 2019 for the first sub-Saharan storage and regasification facility as part of the LNG2Africa program, which aims to create a regional LNG market.
Little tangible progress has been made there since.
These examples illustrate the challenges involved in turning project announcements into operating infrastructure in a sector that requires significant investment, demand visibility, and complex financing structures.
Some markets in sub-Saharan Africa are nevertheless beginning to move beyond the planning stage.
In Ghana, where gas demand is rising rapidly as electricity generation capacity expands and industrialization accelerates, the Tema LNG import terminal is now about 95 per cent complete, according to the Ghana National Petroleum Corporation (GNPC).
The project, developed with Spain’s Reganosa, is expected to help the country supplement domestic gas supply, which has become insufficient to meet demand projected to reach nearly one billion standard cubic feet per day by 2036.
South Africa is home to what appears to be the continent’s most advanced project.
In May, Transnet National Ports Authority awarded Ukwanda LNG a 25-year concession to develop an onshore regasification terminal at the Port of Ngqura.
The facility is part of South Africa’s energy transition strategy and is intended to support the development of 3,000 megawatts of gas-fired power generation capacity while strengthening the port’s role as an energy hub.
Unlike several African projects that have remained at the planning stage, this project now has a long-term contractual framework, is integrated into national energy planning, and has a clearly defined industrial roadmap.
Lloyds Energy’s strategy reflects growing investor interest in markets where gas consumption is expected to continue increasing in response to rising electricity demand and industrialization.
Even so, the challenge is no longer limited to identifying investment opportunities. The ability of governments to secure financing, structure partnerships, guarantee commercial demand, and bring projects into operation has become the main differentiating factor.
In that respect, Africa presents a paradox. The continent offers growth potential widely recognized by international investors, but its regasification sector remains largely underdeveloped. Lloyds Energy’s announcement therefore reflects less the emergence of a new, structured market than a continued bet on demand expected to grow, with realization depending on the ability of African projects to move beyond the planning stage and into operation
The company highlighted South and Southeast Asia, eastern India, the Philippines, Vietnam, Indonesia, and “certain African markets” as regions where demand for regasification infrastructure is expanding rapidly due to industrialization, rising electricity demand, and efforts to strengthen energy security.
The projects under consideration span the full gas value chain, including LNG supply infrastructure, FSRUs, partnerships around LNG import terminals, gas-to-power projects, industrial gas supply, and investments in energy infrastructure. The company said, however, that no final investment decision (FID) has yet been made.