With natural gas prices trading at record lows, many within the sector are using this period to source new reserves before the anticipated "boom" in demand.
In the early 2000s, ten countries exported liquefied natural gas (LNG), with trade primarily based on long-term sales agreements between producers in Southeast Asia and consumers in Europe. However, in the last decade, natural gas has become a globally-traded commodity with new exporters from areas including Latin America and West Africa.
Until recently, West Africa has been plagued by ongoing political unrest and widespread violence, which has hindered the development of productive
and gas sectors and resulted in a decreased risk appetite among foreign investors.
With most majors having already locked in reserves in areas including Canada, Russia, and the US, more and more companies are looking further afield in an attempt to prepare for any price rally. West Africa, a region already noted for its healthy crude reserves, has gained increasing attention from natural gas players and is set to cash in on this interest.
According to the
US Geological Survey
World Oil and Gas Assessment
, West Africa's coast, which covers areas including Liberia, Sierra Leone, and Guinea, is home to an estimated 3.2 billion barrels of oil, 23.63 trillion cubic feet of natural gas, and 721 million barrels of natural gas liquids.
Regional market interest was highlighted recently when the
West African Gas Pipeline Company
(WAPCo) co-hosted West Africa's first Gas Stakeholders Engagement Forum in Accra, Ghana.
A statement issued by the World Bank explained that the forum intended to build upon the
of the West African Gas Pipeline (WAGP) project, which has enabled the supply of Nigerian gas to Benin, Togo, and Ghana. The pipeline system has a capacity of 800 million standard cubic feet per day (MMscfd), and will
a volume of 170 MMscfd before peaking at 460 MMscfd.
The pipeline was a significant step in relation to the transportation of gas for export, as well as for use within the region. It links into the existing Escravos-Lagos pipeline at the
Nigerian Gas Company
's Itoki Natural Gas Export Terminal and proceeds to a beachhead in Lagos. From there it moves offshore to Takoradi, Ghana, with gas delivery laterals from the main line extending to Cotonou (Benin), Lome (Togo), and Tema (Ghana).
Interest in West African natural gas has not been limited to juniors. French energy giant
) recently announced that it has inked a
with the Ivory Coast's national oil company,
, for three ultra-deep offshore licenses.
Earlier this year the company also stated that it has begun the second phase at its Ofon project in Nigeria. The phase is aimed at unlocking the field's undeveloped reserves to increase production to 90,000 barrels of oil equivalent per day. Most of the development is dedicated to
recovering natural gas
, which will be compressed and evacuated to shore.
Kosmos Energy Ltd.
), an oil and gas exploration and production company, has confirmed the presence of natural gas reserves in offshore Ghana.
, the company announced that its Teak-3A appraisal well confirmed a northern extension of the Teak discovery on the West Cape Three Points Block, with analysis indicating that the well encountered 35 meters of hydrocarbons in multiple good-quality reservoirs. The analysis also identified 13 meters of 36 to 39 degree API gravity and 22 meters of gas-condensate pay.
A long time coming
Natural gas exploration into regions such as this is not the result of a knee-jerk reaction.