African gas infrastructure projects must be ESG proof __Experts
Sopuruchi Onwuka
Energy and infrastructure investment analysts have warned developers of gas facilities and infrastructure in Africa to benchmark project processes and standards against the prevailing requirements for environment, social and governance principles.
They argue that meeting new standards in facility and infrastructure development in the industry requires that has become necessary for long tern values and competitive in an extremely dynamic international gas market.
Panelists at the ongoing Africa Oil Week (AOW) in Cape Town, South Africa, agreed on Tuesday that whereas the number of gas pipeline projects in African is rising, care must be taken to ensure that they offer long term value as ESG standards take hold in the global energy industry.
This means shaping an offer that meets the financial and environmental sustainability needs of stakeholders. The panelist drawn from delegates from different parts of the world agreed that Africa’s gas investment proposition must be relevant and future-proof, if it is to continue to attract global capital.
It would be noted that gas development ambitions have grown in the past few years, supported by renewed exploration and production activity and pragmatic energy transition plans. And the position of gas as transition fuel and its continued acceptance as clean has made it important in the continent’s decarbonization commitments.
Head of Sub-Saharan Africa Region at Eni, Mario Bello, stated at the event that “natural gas is at the centre of what we are doing in Africa,” adding that “it’s the cleanest fossil fuel, producing fewer emissions than coal, so it plays an important role as we transition to renewables.”
Eni enables this through its Floating Liquified Natural Gas (FLNG) projects, particularly in Mozambique and the Republic of Congo. Bello emphasised the technology’s ability to unlock stranded offshore gas resources, accelerate project timelines, and contribute to both domestic energy security and export revenue.
“Floating LNG is the key to unlocking the region’s gas potential, making it easier and faster to develop offshore resources,” Bello explained.
However, financing these ambitious projects remains a significant hurdle. Paul Eardley-Taylor, Head of Oil & Gas, Southern Africa, at Standard Bank, emphasised the need for bankable projects that address investor concerns, particularly around sovereign risk. He highlighted the transformative potential of both large-scale LNG projects and smaller, domestically focused gas ventures.
“The impact of these projects in African markets is incalculable,” Eardley-Taylor said, citing the potential for job creation, economic growth, and improved energy access. He further emphasised the importance of small-scale LNG and helium projects, particularly in markets like South Africa and Namibia.
Equinor’s Senior Vice President for Africa, Nina Birgitte Koch, stressed the importance of a stable investment climate to attract international capital. She highlighted the need for competitive projects with strong environmental credentials, particularly in reducing carbon emissions. “CO2 is the key criteria,” Koch said. “It’s not just a ‘nice to have’ any more. I don’t think it’s possible to get capital to a big LNG project unless it’s highly competitive when it comes to CO2.”
The panel also discussed the critical role of technology and regional cooperation in maximising the benefits of Africa’s gas resources. Gianluca Ciricugno, Africa Director, Enterprise Customer Solution at Baker Hughes, emphasised the need for a long-term vision and collaboration between governments, investors, and technology providers.
“It requires a broader vision, probably government and all the people around the table, with a long-term approach… and not just four-year terms,” Ciricugno urged, highlighting the need for stable regulatory frameworks and a commitment to infrastructure development.
Dr Tshepo Mokoka, Group COO of South Africa’s Central Energy Fund (CEF), echoed the call for government intervention to address market failures and unlock investment. He outlined CEF’s role in enabling critical gas infrastructure projects, such as the Romp pipeline and LNG import terminals. “We need to solve the market failure,” Dr Mokoka said, highlighting the need for government-backed gas offtake agreements and risk-sharing mechanisms to attract private capital.
ExxonMobil’s Executive Director Global, LNG Marketing, Deri Irawan, emphasised the importance of a holistic approach to project development, considering not just the technical and economic aspects but also the social and political landscape. He highlighted the need for strong partnerships and stakeholder engagement to ensure long-term project success. “It is insufficient to just bring a commodity to the doorstep,” Irawan explained. “You also need to unlock that value chain.”
With Africa on the cusp of a gas revolution, the panel’s message was clear: the continent has the resources, the ambition, and the opportunity to become a major player in the global gas market.
However, success hinges on creating a stable and attractive investment climate, embracing technological innovation, and fostering regional collaboration to ensure that Africa’s gas resources benefit both its people and the planet.
