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Senegal’s Sought After Gas Reserves

President Macky Sall of Senegal has become a popular figure on the international stage. His country’s gas reserves, from which exports are due to start in the next couple of years, are now the target of intense interest by European leaders desperate to find alternatives. Sall, for his part, has been playing up Europe as a destination for LNG, noting that Senegal’s position at the western extremity of Africa puts it just a few days’ shipping time from European markets, while also suggesting there would be competition from Asian buyers. By agreeing to deals that kept the upfront operational and financial costs and risks to levels deemed acceptable for international oil companies (IOCs), Senegal is now on course to be a gas exporter by 2023, with enough production to serve markets abroad and at home for decades if demand holds up. That would be just eight years after commercial gas reserves were discovered in Senegalese waters – a fast turnaround in the context of African hydrocarbons projects. While the short-term prospects for hydrocarbons exports are positive, due to the impact of the Ukraine war on global supply, the risk remains that that freshly discovered reserves in Senegal and elsewhere may not be exploited to their full potential if global fossil fuel demand falls in the next 10-20 years. Sall, who is the current chairperson of the African Union under a rotating system, is one of several African leaders calling for natural gas to be regarded as a legitimate transition fuel for African nations.

SOURCE: AFRICAN BUSINESS

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