A huge swathe of natural gas reservoirs have been discovered off the East coast of Africa and are set to catapult the region into being a major natural gas player on the world scene.
Already, planned investments worth tens of billions of dollars actually exceed the gross domestic products of some host nations, including the regional powerhouse Kenya, and all the way down to the impoverished Mozambique.
According to the U.S. Geological Survey, East Africa’s coastal region — which stretches out to the Seychelles — holds 441.1 trillion cubic feet of natural gas; that’s approximately 50 percent more than in Saudi Arabia.
“The gas discoveries offshore in Mozambique and Tanzania are large and world-class, with potential for more to come, including prospects for an oil leg,” said Duncan Clarke, CEO of oil consulting company Global Pacific.
“These finds will lead to LNG (liquefied natural gas) plants … and will make the zone akin to the Northwest Shelf in Australia,” which can produce 23 billion cubic meters a year, he told AFP.
For example, Houston-based Anadarko in June announced that it had found up to 60 trillion cubic feet of natural gas resources in northern Mozambique, which led to the company proposing an investment of $15 billion to set up LNG facilities. Mozambique’s gross domestic product for 2011 was only $12 billion.
“It will bring a huge flow of foreign direct investment in the region that would contribute to rapid economic growth in the region,” said Silas Olang, east African coordinator from resources watchdog Revenue Watch Institute.
But there will be difficulties in setting up major industry in the region.
“There’s very limited infrastructure in place,” said Tim Dodson, vice president for exploration at Norway’s Statoil on the company website.
Mozambique is, again, a good example of the problems that will be faced. Pemba is a port city, and the closest for offshore drillers. It is located 3,000 kilometres north of the capital of Maputo, linked by dirt roads and with very little housing.
Not only that, but the countries in question lack the skilled workforce to set up such industries, with only 50 mining graduates a year.
Time will tell, but the hope is that the investment and risk of losing said investments will minimise the soon-to-be expected corruption so native to the region. This won’t be a problem solved anytime soon, though — production is planned for five years from now, and may take even longer.
“There could be the expectation that natural gas will be exploited tomorrow and we’ll benefit immediately,” said Olang. But that simply is not going to be the case.
Of course, the green community is a bit split on natural gas. Many see it as an important “bridge fuel” to more truly clean, renewable energy. However, others have shown that it’s effect on the climate is so bad that it’s not worth using as a bridge fuel (even if that’s all it would be used for, which seems debatable in the instance above), and it has also been linked to earthquakes on several occasions and pollution of local water supplies.
I know our readers are also a bit split on natural gas — what are your thoughts about all this?
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