Nine African nations are set to benefit from a $175bn US Government project to invest in sub-Saharan power plants and support African gas production.

The initiative seeks to add 16,000MW of gas-fired power across sub-Saharan Africa by 2030. The US Agency for International Development’s Power Africa coordinator announced the ‘Gas Roadmap for sub-Saharan Africa’ project last month, identifying known reserves that hold a potential of 400GW in total.

US Secretary of Energy Rick Perry wrote in the report: “A key ingredient in Africa’s energy mix is, and will continue to be clean natural gas. Natural gas and LNG projects have the potential to generate essential electricity quickly and at reasonable prices.”

Supported by the US Government, multinational energy companies including ExxonMobil, Eni, and GE will invest in gas power projects in Angola, Côte d’Ivoire, Ghana, Kenya, Mozambique, Nigeria,  Senegal, South Africa, and Tanzania. These countries were selected due to their large populations, higher levels of national wealth and because they have local gas resources or liquefied natural gas (LNG) import projects. Through sending LNG into the region, the US Government claims it can generate at least $5bn per year.

African gas production by country

Gas resources have been discovered in 14 countries across sub-Saharan Africa. Nigeria alone retains 81% of all proven reserves, while several undeveloped fields in Tanzania and Mozambique could potentially account for 62% of total contingent resources. Other nations without reserves are developing infrastructure to import natural gas to support demand for African gas production.

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By GlobalData

Tanzania recently discovered natural gas estimated at 57 trillion cubic feet, and the government said it anticipates gas power plant capacity to increase from 1,501MW in 2015 to 4,915MW by 2040. The government built a $345m natural gas plant on the outskirts of Dar es-Salaam, which has the capacity to generate 240MW, along with two other 600MW projects.

Between 2015 and 2017, Tanzania saved around $4bn through purchasing domestically produced natural gas instead of importing fossil fuels, according to Tanzania Petroleum Development Corporation (TPDC).

The roadmap outlines certain challenges to African gas production, including availability, delivery methods, financial strength of gas off-takers, and the lag in downstream infrastructure such as power transmission and distribution capacity. It also highlights the ability of various markets to absorb newly discovered power resources and gas.

Perry wrote in the report: “On a realistic and practical level, to achieve national and regional self-sufficiency through regional interdependence, the commercial fundamentals of the gas and gas-to-power sector in each country need to be robust and reliable on a sustainable, long-term basis. The energy sectors of many West African countries have not yet proven to meet these criteria.”

Gas is a highly competitive source of cleaner energy with gas-to-power potentially running as low as $0.10 per kilowatt hour (kWh) for integrated LNG projects, and $0.15 per kWh for small-scale and distributed power projects. The current average cost of generation in sub-Saharan Africa is $0.18 per kWh, and only $0.07 to $0.08 per kWh in Ghana, Nigeria, and Mozambique.