As the energy industry decarbonises its operations, natural gas is becoming an increasingly important part of the energy mix, opening up a number of opportunities for the African gas industry.
“Sometimes oil is even seen as a by-product of gas,” said Luca Vignati, upstream director at global energy company Eni, speaking at Africa Oil Week (AOW), which took place at the Cape Town International Convention Center here, starting in October.
Vignati gave the example of Eni’s Baleine project in Côte d’Ivoire, which contains an estimated 2.5 billion barrels of oil and a much larger 93.4 billion cubic meters of gas.
Vignati said another decarbonization strategy was to structure projects to include major carbon offset initiatives.
He said that Eni was operating Baleine as the first Scope 1 and 2 net-zero emissions development in Africa.
The project includes carbon compensation certified by the VERRA international standard.
Within the framework of the project (https://bit.ly/3RHyLIv), Eni will distribute 100,000 improved stoves, targeting more than 300,000 people.
The goal is to replace traditional wood-based cooking devices, reducing pressure on forest resources.
During another presentation at AOW, McKinsey Associate Partner Oliver Onyekweli noted that Africa was one of the few regions in the world likely to see rising energy demand in the coming decades.
However, he said that companies hoping to be part of this next energy boom should look to decarbonize their production.
“Decarbonization is becoming a license to operate,” Onyekweli said.
He said an effective way for African oil producers to decarbonize was to expand into natural gas, while renewable energy offered the opportunity to open up new revenue streams and secure energy access for the people of the continent.
Recent natural gas discoveries leave Africa well positioned to take advantage of the decarbonisation trend.
The Brulpadda and Luiperd (https://bit.ly/3T29kCi) discoveries off the southern Cape coast of South Africa, for example, have been hailed as potential “game-changers.”
Luiperd is estimated to contain 2.1 trillion cubic feet (tcf) of gas and 112 million barrels of condensate, while Brulpadda is estimated to contain 1.3 bcf and 80 million barrels of gas and condensate.
With the increasing pressure to decarbonise, it is also becoming more difficult to obtain financing for African hydrocarbon projects.
“The main constraint to growth in the energy sector in the future will not be in the area of human resources or deal flow, but in access to capital,” said Paul McDade, chief executive of Afentra, an independent African energy company.
Other independent energy companies agreed that gas projects were easier to finance.
“US and European banks seem more willing to finance gas projects,” said Thomas Kolanski of independent oil and gas company BW Energy.
“We are shifting our focus in that direction.
The gas is cleaner, it reduces the global carbon footprint and everyone is always on our side.”