Africa Becoming a Major Force in Natural Gas Production
By Brandon Engel – One of the most interesting trends in the global energy industry is the recent increase in the use of natural gas on the continent of Africa. Both compressed natural gas and liquified natural gas are growing in importance in such countries as South Africa and Angola. Although these areas still have small domestic markets for natural gas, Africa as a whole is believed to possess approximately 10% of the total worldwide recoverable reserves of natural gas, so production is likely to grow to meet both domestic and international demand.
Due to the fact that natural gas can be compressed or liquified, its volume can be reduced, allowing easier storage and transportation to market. It also tends to be cheaper than petroleum-based fuels for automotive purposes. In South Africa, vehicles can run on natural gas for approximately 70% of the cost of using gasoline. Besides cost, natural gas is also very clean burning when compared to other fossil fuels. Due to this reduction in emissions and waste materials, vehicles that burn natural gas usually require less maintenance than those that use traditional fossil fuels, and they are also better for the environment.
Despite these advantages, there are a few drawbacks to using natural gas to power automobiles. The cylinders in which gas must be stored are often intricate and bulky, making these vehicles cost more than gasoline-fueled counterparts. At the same time, there is less room for passengers and cargo because the cylinders tend to take up a lot of space. Furthermore, the typical range before having to refuel is significantly reduced when using compressed natural gas because it is not as energy-dense as gasoline, which is already a liquid rather than a gas at standard temperature and pressure.
It seems clear that the balance of advantages and disadvantages is tilting towards growing acceptance of natural gas in Africa. Production on the continent has been increasing quickly over the past few decades. In 1980, only 24 billion cubic meters of natural gas were produced on the continent according to a report by BP. By 1990, that figure had jumped to almost 69 billion cubic meters, and in the year 2000, about 130 billion cubic meters were produced. In 2013, production of natural gas in Africa stood at just over 204 billion cubic meters.
This trend may be expected to continue into the future, but there are a few reasons to temper expectations. There are many corrupt or ineffective governments in the region, which may dissuade potential investors from funding natural gas production. Additionally, transportation infrastructure in Africa tends to lag behind that found in other areas of the world, increasing the costs of doing business. Potential conflicts or wars could disrupt production.
A liquified natural gas plant was opened in 2013 in Angola to great public acclaim. However, it is set to be shut down for months in order to complete renovations necessitated by design errors and corrosion. The renovations are expected to cost more than $1 billion. This case is an example of the huge commitment required from investors and the potential downfalls of doing business in places that do not already have a large, established natural gas industry.
It’s clear that ramping up natural gas production in Africa will not be a bump-free ride for the local governments, multinational corporations, and other parties interested in this relatively green form of fuel. Nevertheless, there is a large and growing demand not only within Africa, but also in other countries that are looking to cut their greenhouse gas emissions.
