Russian gas giant, Gazprom to invest billions in African LNG projects

Oredola Adeola

Russian-based global energy company Gazprom has revealed plans to expand cooperation with African countries to support the development and maximization of the continent’s liquefied natural gas (LNG) projects.

This was the major highlight of the African Energy Chamber-Gazprom international roundtable held in Johannesburg, South Africa on Thursday under the theme, ‘The Benefits of Natural Gas for the Population and the Economy.

EnergyDay gathered that the company is looking to expand its reach beyond Europe and Asia, where it has already established a strong presence. Gazprom’s move comes as Europe is looking to reduce its dependence on Russian natural gas imports.

Energy experts and other speakers also the gas forum emphasized the critical role gas plays in the global energy mix and how Russian expertise can help forge a new future of energy security and economic prosperity in Africa on the back of gas.

NJ Ayuk, Executive Chairman, African Energy Chamber (AEC) in a statement noted that over six hundred million people across Africa do not have access to electricity, while about nine hundred million do not have access to clean cooking technologies.

He said, “For Gazprom, as a global energy company, to pick Africa and partner with the chamber to drive this message, thinking of solutions and ideas at a time when we are faced with people telling us to halt gas production, this could not come at a better time.”

Dmitry Khandoga, Gazprom’s Head of Department stated that Gazprom’s expertise stands to play an important part in supporting the development and maximization of gas in Africa.

He said, “We see that Africa is well positioned for future growth but at the same time, there are a number of key issues that need to be addressed such as food security and energy security. By 2040, the number of cities in Africa with a population of more than five million people will more than double.

“No one can rely on traditional fuels in the cities. If you are developing the digital economy, you need to make sure that energy is reliable and secure. Gazprom has vast experience in all spheres of the gas value production chain,” he said.

Khandoga also noted that his company emerged as a globally competitive gas giant owing to progress that has been achieved across every segment of the value chain.

According to Khandoga, this year, Gazprom celebrated its 30th anniversary. Our total reserves amount to 20.943 trillion cubic meters of gas, enough to supply the entire world.”

Khandoga believes that natural gas is not a transition fuel, it is a destination fuel. We are confident that the technological experience of Gazprom will be in very much demand by our African counterparts.”

Dahiru Moyi, Advisor to the Minister of Federal Ministry of Finance, Budget and National Planning, in his presentation said that Nigeria has embarked on an ambitious gas agenda of its own, with projects being driven under the country’s ‘Decade of Gas’ initiative – a framework for amplifying investment and development across the entire gas value chain on the back of policy clarity.

Moyi however noted that despite offering significant resources, lack of investment has limited development in Nigeria, adding that Africa does not have much funding, but the gas resources. He noted that the funding challenge is the reason why it is important to come up with new approaches to unlock the financial bottleneck.

Moyi stated that traditionally, Gazprom has not been able to operate in Nigeria due to lack of policy, a trend which has now been eliminated with the implementation of the Petroleum Industry Act (PIA) in 2021.

He said, “Gazprom has the best intentions for Africa, and together, there can be some form of creative financing. We will welcome and be glad to see Gazprom come back to the negotiation table with Nigeria. Before, there was no gas policy in Nigeria or law. We have the PIA which is a clear path for how to operate in Nigeria.

EnergyDay gathered that the Russian gas major’s investment in African LNG projects could help Europe find a new energy supplier and also help the continent develop its natural gas industry and create jobs.

For instance, Nigeria, which has Africa’s largest natural gas reserves, under President Bola Tinubu has promised massive fiscal incentives and opportunities for major oil companies interested in investing in the country’s LNG projects.

While LNG is seen as the most profitable gas strategy for African countries, EnergyDay is of the view that Gazprom’s proposed investment in African LNG projects could have significant implications for the global energy market and the economies of African countries.