Nigeria To Begin To Supply Gas To South Africa From 2024

In a groundbreaking move, Riverside LNG, a prominent Nigerian energy company, has disclosed ongoing discussions regarding a potential agreement to supply gas to South Africa starting from the first quarter of 2024. This development marks the initiation of what could be the first-ever gas deal between Nigeria and South Africa, signaling a potential collaboration in the energy sector.

CEO David Ige, in an exclusive interview in Abuja, revealed the company’s strategic focus on expanding its reach across the continent. Earlier this year, Riverside LNG formalized a gas-export partnership with Johannes Schuetze Energy Import AG of Germany, demonstrating its commitment to international collaborations.

“We’d probably very early in the year close out another segment of the market, an off-take for South Africa,” Ige stated.

“There’s a massively evolving gas market in the region, covering southern Africa, western Africa, all to northwest Europe and to the Caribbean and South America broadly.”

While emphasizing the confidentiality of ongoing discussions, Ige refrained from providing specific details about the negotiations with South African counterparts. The company is simultaneously exploring potential opportunities in Liberia and Cameroon, further solidifying its position as a key player in the African energy landscape.

Strategic Implications for South Africa: Addressing Power Shortages and Embracing Renewables

Key Considerations:

South Africa’s persistent power shortages due to ageing and inadequately maintained power stations managed by Eskom Holdings SOC Ltd.
Delays in procuring extra electricity from private providers due to grid constraints and legal disputes.
Lack of an LNG facility in South Africa; deliveries from the Riverside LNG project expected to start in 2027.
Shifting towards renewable energy sources with a goal to achieve 60 gigawatts of power from renewables by 2030.
Regional Dynamics:

Southern African Development Community endorses a $17 billion plan for natural gas infrastructure to enhance energy provisions in the region.
Investments in pipelines and terminals for both local and imported supplies.
Riverside LNG’s potential gas supply deal with South Africa aligns with the nation’s efforts to diversify its energy sources, moving away from coal dependence. With 80% of electricity production currently reliant on coal, South Africa aims to achieve a significant portion of its power from renewables by 2030.

CEO David Ige emphasized the broader opportunities for Nigeria, stating, “We see a huge opportunity for Nigeria in being a trading hub.” The evolving gas market in the region presents a strategic advantage for Nigeria to position itself as a pivotal player in the global energy trade.