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In its African Energy Outlook 2020 report launched recently, the African Energy Chamber (AEC) highlighted the importance of increased infrastructure capacity in Africa’s long-term industrial development.
Relying on the $12 billion Dangote Refinery in Nigeria and Ghana’s Tema LNG Terminal, AEC noted essential role such projects play in revamping the sector and creating opportunities for private sector investors.
According to the report, “At a time when the low oil price is gripping treasury revenues, private capital is developing key oil and gas infrastructure projects which could have a significant impact on the African energy and power landscape over the next decade.”
Laying emphasis on the Dangote Refinery, AEC called attention to the current state of Nigeria’s infrastructure and the contribution the project would have specifically as the country works towards tripling its refining capacity to 1.5 million bpd by 2025 as a means to reduce its reliance on fuel imports.
The report averred that “The refinery’s tank farms are set out for completion in Q4-19 and they may be used as a depot before the refinery’s production starts. This would provide an immediate increase to fuel storage capacity.”
On the other hand, Ghana’s determination to become sub-Saharan Africa’s first LNG importer in 2020 is set to become a reality as the Tema LNG terminal project nears completion. The project will be able to cover 25 percent of Ghana’s total electricity generation capacity, with gas providing a cheaper alternative to oil.
The report noted that “The deal with Rosneft enables Ghana to diversify gas imports away from Nigeria, which has consistently failed to provide the agreed level of supply since the West African Gas Pipeline started operating (back in November 2011),” the Chamber explained. Adding that the emergence of offshore storage and regasification technology is enabling smaller, lower-risk, rapid LNG solutions that could be replicated elsewhere in the region in countries with substantial gas reserves.
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