Sub-Saharan Africa holds the highest potential to become a “niche” market for liquefied natural gas to feed power plants as the world faces a growing surplus of the fuel, according to BMI research.
Ivory Coast, Ghana and South Africa are the most likely destinations for LNG in the region, the analysts wrote in a note dated Thursday. As most countries have limited domestic consumption and infrastructure, integrated LNG-to-power projects will be an anchor for wider demand creation, BMI said.
“In the face of reduced offtake from traditional buyers” in northeast Asia, sub-Saharan Africa holds potential as a new market, BMI said. “Government support through pricing and offtake agreements is crucial for long-term gas import growth.”
South Africa’s Department of Trade and Industry created a gas industrialization unit in May, which will initially focus on importing LNG as part of a gas-to-power program to add 3,126 megawatts of capacity between 2019 and 2025. Ghana earlier this year signed a deal with Quantum Power for construction and operation of LNG storage and regasification facilities.
Ivory Coast and Ghana have “the most prospective markets for integrated LNG-to-power projects” with plans already in place and room for further growth within BMI’s 10-year forecast period.