Simplifying Energy

How The East African Energy Industry Is Preparing For Growth In The Demand Of Liquefied Natural Gas (LNG).

With substantial natural gas discoveries in the past ten years, East Africa has the potential to be a new source of global energy supply.

For example, Look at what is happening in Mozambique. The latest Final Investment Decision (FID) on the US led 20billion Mozambique LNG project is one of the largest to be sanctioned in Sub-Saharan Africa within the first nine months of the year.

Also, look at what is going on in Tanzania. The US led $30 billion LNG project is in it’s planning phase. The project will play an important role in the global LNG supply chain.

China’s Thirst For Gas

East Africa is next door to China’s gas market and China’s need for the alternative source of energy is much greater. Air pollution is a major issue in Chinese cities. The country wants to reduce its reliance on coal, and minimize carbon dioxide and other emissions.

 

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Furthermore, China imports Gas by sea in the form of LNG from different parts of the world including Russia, Myanmar just to name a few.

According to the oil rush, China’s government expects a three-fold increase in gas demand within 15 years. China is struggling to meet its Gas demand and East Africa is in a great position to help meet them.

Furthermore, India consumes 22 million cubits of Liquefied Natural Gas a year. The rate is expected to increase in the next 5 years.

The chairman of Gail India Ltd pointed out that his company will buy more LNG in 2023 and 2024.

A new Stifel report says: “The Japanese have been very hesitant buyers of U.S. LNG recently, and seem to prefer Mozambique for their future needs as Japanese buyers are less interested in Henry Hub and do not want to risk dealing with a small development companies.

Given that a substantial increase in demand is expected, if East African would further their LNG projects, Asian buyers would no doubt be interested in buying.

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Updated: October 18, 2019 — 6:29 PM
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