US Energy Sec Seeks LNG Sales in Africa

The US will soon supply energy to Nigeria, Cote d’Ivoire and South Africa, US energy secretary Rick Perry told the Africa Oil Week Conference last week in Cape Town.

“The United States wants to be partners with Nigeria, South Africa and throughout the continent,” Perry said October 26 according to Nigerian newspaper Vanguard. According to one unnamed US delegation member, talks on supplies are ongoing and could include LNG and coal, with one aim being to supply power to landlocked areas. But it seems doubtful that Nigeria will need US coal or LNG in the medium term.

In July 2017, the International Energy Agency declared that the US would become the world’s leading LNG exporter by 2022, ahead of Australia and Qatar. By then the IEA forecasts 39 consuming countries, compared to 15 in 2007.

For Nigeria which produces both gas and coal, the news might seem quite paradoxical, as it has substantial natural gas and coal reserves of its own. It produces only 5,000 MW of electricity, mostly from gas, but demand for electricity is seen at some 12,000 MW.

Clearly the US will be competing with other suppliers into the region, should a planned Cote d’Ivoire LNG import terminal enter service next year, followed by ones in South Africa in the early 2020s. None is as yet scheduled in Nigeria. Ghana has recently signed up for LNG imports from Gazprom starting 2019, most likely sourced from nearby Cameroon. It seems improbable too that South Africa, where coal generates about 90% of the nation’s power, will need to import coal from the US.

But Perry’s visit to South Africa is seen as part of a concerted US push to create markets for the country’s commercial LNG exporters – at present only Cheniere is exporting and still expanding, but others are to follow including Dominion-led Cove Point later this year and Freeport LNG late 2018. Similarly Perry toured Japan, China and South Korea this summer on a similar LNG trade mission, and next month US commerce secretary Wilbur Ross was in China and will be again next month on a similar trade mission.

Olivier de Souza