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Nigeria-based Riverside LNG has said it’s in talks to supply gas to South Africa, in what would be the first such deal between the two countries, Bloomberg reported on Wednesday.
The company earlier this year signed a gas-export partnership agreement with Johannes Schuetze Energy Import AG of Germany and is now looking for deals on the continent, Chief Executive Officer, David Ige, said in an interview in the capital, Abuja.
Ige is a former Group Executive Director of the Nigerian National Petroleum Company Limited (NNPC) and is widely recognized for initiating and developing the Nigeria Gas Master Plan.
Nigeria has Africa’s largest gas reserves and is largely regarded as having more gas than oil, although more attention has been paid to oil exploration over the years.
“We’d probably very early in the year close out another segment of the market, an off-take for South Africa,” said Ige.
“There’s a massively evolving gas market in the region, around 3,000 nautical miles of Nigeria. So that covers southern Africa, western Africa, all to northwest Europe and to the Caribbean and South America broadly,” he added during the interview.
Ige declined to provide further details on the talks with South African counterparts, citing confidentiality clauses. The company is also exploring opportunities in Liberia and Cameroon.
South Africa faces chronic power outages with the country’s old and poorly maintained power stations, run by debt-stricken state utility Eskom Holdings SOC Ltd., unable to keep up with demand.
Plans to buy more electricity from private producers have been delayed by grid constraints and court action.
“South Africa currently doesn’t have a facility to receive LNG. Deliveries from the project won’t start until 2027, so there’s “enough time for import terminal infrastructure,” Ige said.
The country relies on coal for four-fifths of its power generation, but with investments unlikely in the sector, it is now looking at renewable sources to generate as much as 60 gigawatt of its power needs by 2030.
A report produced by BloombergNEF and Bloomberg Philanthropies found that battery storage and flexible gas plants are the most cost-efficient solution to complement growth in solar and wind generation and guarantee power supply.
The 16-member Southern African Development Community (SADC) had backed a $17 billion natural gas infrastructure plan to bolster energy supplies in the region, approving a blueprint to invest in infrastructure such as pipelines and terminals for local and imported supplies.
“A lot of those countries are looking to go gas,” Ige said. “We see a huge opportunity for Nigeria in being a trading hub,” he added.
Although a major holder of the world’s gas reserves, Nigeria has been unable to fully take advantage of its abundant gas resources mainly due to lack of investments, leading to a deficit in gas transportation infrastructure.(www.naija247news.com)