First Gas Production
With project partners bp and Kosmos Energy targeting first gas production from the GTA liquefied natural gas (LNG) project in late 2023 – having completed the construction of the Floating Production Storage and Offloading unit which departed China for the project’s site offshore Senegal/Mauritania in late January 2023 – both Senegal and the MSGBC region are set to witness accelerated economic growth.
With phase 1 targeting 2.3 million tons of LNG per year, the project will unlock a new era of energy security and stability for Senegal and Mauritania while enhancing the countries’ gross domestic product (GDP) growth through energy monetization. With the MSGBC region kickstarting its oil and gas market boom, GTA will lay the foundation for industry growth while ensuring a just and inclusive energy transition happens in the region on the back of gas development and exploitation.
Final Investment Decisions on the Horizon
Following the success GTA, regional actors are set to turn their focus towards other large-scale gas developments, with a suite of final investment decisions (FID) being targeted for both 2023 and 2024.
First on the agenda is the Yakaar-Teranga Development, whose FID is anticipated in 2023 with first production slated for 2024. Located offshore Senegal, the bp-Kosmos partnership’s Yakaar-Teranga’s massive reserves – amounting to over 20 trillion cubic feet (tcf) of natural gas recoverable through 2050 – will open up new investment opportunities across the upstream and power generation sectors as the country prioritizes gas-to-power to achieve universal access by 2025.
Meanwhile, Mauritania is also hoping to mirror the success of GTA with FID slated for 2023 for the Banda Gas Field. Targeting widespread electrification on the back of natural gas, the 1.2 trillion cubic feet Banda gas field is set to transform the regional power sector through its Fast LNG Liquefaction technology, with the project set to produce LNG for Mauritania’s power market. The project will see gas supplied to the existing 180MW Nouakchott Nord thermal power plant, alongside a 120MW gas-to-power facility. In December 2022, New Fortress Energy signed a development and partnership agreement with the Mauritanian Government for the project.
Licensing Rounds Open Up New Upstream Plays
As Senegal and Mauritania seek to strengthen their reserve portfolios with the launch of new exploration activities and The Gambia, Guinea-Bissau and Guinea-Conakry look towards making large-scale discoveries of their own, 2023 is expected to become a hive of activity with the launch of new licensing rounds and drilling campaigns.
During the year, Mauritania is expected to award its Offshore Licensing Round – launched in 2022 and comprising 28 new offshore blocks; following the launch of its second major offshore licensing round in 2022, Senegal is expected to award blocks in 2023; Guinea-Conakry’s launch of a 22-block licensing round is also expected to unlock the country’s energy sector growth; The Gambia is fast approaching its second major licensing round with seven new blocks on offer; while Guinea-Bissau opened five blocks for bidding under a special deepwater tender round in 2022.
Gross Domestic Product Growth
In 2023, the MSGBC region has emerged as the destination of choice when it comes to foreign investment. Following GTA, new interest by global players is expected to translate into a number of new capital commitments being made, which in turn are set to create significant positive impacts on the regional economy, scaling up gross GDP this year and beyond.
Following the start of production at both the GTA and Sangomar developments, the World Bank anticipates Senegal to generate up to $1.4 billion in hydrocarbon revenues by 2025, with GDP growth expected to grow by 5% and 5.6% across the wider West African economy in 2023 and 2024, respectively.
Meanwhile, Mauritania will record a 4.9% increase in GDP spurred by increases in gas investments, according to research firm Economist Intelligence. Similarly, the Gambia is anticipated to record a 6.4% growth in its economy in 2023 while Guinea-Conakry will record a 5.3% increase in GDP in 2023 on the back of the country’s burgeoning extractives industry.
All this and more will be further unpacked during the MSGBC Oil, Gas & Power 2023 conference and exhibition – the region’s premier event for the energy sector. Taking place in Mauritania from 21-22 November 2023, the event will unite MSGBC’s energy policymakers and companies with global investors to showcase the investment opportunities across the entire gas value chain. As the region begins to witness the benefits of first gas production, the 2023 edition of the MSGBC Oil, Gas & Power conference will discuss what happens next, and how the region can maintain a positive growth trajectory across its burgeoning oil and gas industry.
