Financing and Structuring LNG Projects in Africa

LAGOS (Capital Markets in Africa) – Standard Bank is one of Africa’s leading banks, with an on the ground presence in 20 African countries. The bank has an established Oil & Gas practice which serves relationships and executes transactions across the upstream, midstream and downstream sectors.

Africa’s Current LNG Position
Africa started early in LNG, with Algeria exporting its first cargo to the UK as far back as 1964. Subsequently, until 2017, despite its established position in upstream Oil & Gas, Africa had operational plants in only four (4) counties: Algeria, Angola, Equatorial Guinea and Nigeria, with two plants in Egypt idle due to insufficient gas supplies. It is this article’s argument that this position is soon to rapidly change, with multiple onshore and Floating LNG (‘’FLNG’’) projects under development, with FSRUs in operation and under development.

Africa’s Future LNG Position
Africa’s LNG export position is primarily changing due to:

• Several FLNG projects under development: Hilli Episeyo FLNG (Cameroon) has recently started-up; Ophir’s Fortuna FLNG (Equatorial Guinea) is under advanced development; Coral FLNG (Mozambique), see below case study, recently achieved FID and Tortue FLNG (Senegal / Mauritania) is also under development;
• Several onshore LNG projects (more traditional in the industry) are under development: an additional train at Africa’s largest plant, Nigeria LNG, is planned; multiple onshore trains are planned by two separate developers at Palma (Mozambique). In addition, the operation of the transformational Zohr field in Egypt, may lead to sufficient feedstock to facilitate the restart of the Idku and SEGAS projects. Tanzania is also a potential LNG exporter, but has made slower progress; and
• Lagging a little behind except in Egypt, several LNG import projects are under development.
• Utility scale import projects have been proposed in Morocco and South Africa, with smaller FSRU-driven projects proposed in Benin, Ghana, Ivory Coast, Mauritius and Namibia.

An extract from Bouncing Back: African Oil and Gas. Please download by clicking: INTO AFRICA PUBLICATION: MAY 2018 EDITION.

Contributors’ Profiles
Paul Eardley-Taylor is responsible for Standard Bank’s Oil & Gas sector coverage activities for Southern Africa (11 countries), across upstream, midstream, downstream, services and process industry clients. Paul has 20 years of energy corporate and investment banking experience, covering the Oil & Gas, Power & Utilities and Renewables & Carbon sub-sectors, and has been based in Africa for 10 years. Paul has extensive experience of the SA/Southern African energy environment, as adviser, banker and financier. Prior to joining Standard Bank in 2009, Paul worked for HSBC for over 10 years and gained extensive experience of transactions across EMEA and select global markets in Asia/Australasia. Paul holds degrees from Birmingham University; London University and a MBA from Henley Management College. Paul is a Fellow of the Securities & Investment Institute, a member of the Energy Institute and has completed Harvard Business School’s Global Energy Seminar.

Dezlyn Makhetha, 9 Years experience in Banking (including Corporate Finance and Project Finance Advisory: Renewables). 5 Years of experience in Oil & Gas. Responsible for Standard Bank’s Oil & Gas sector coverage activities in the following SADC countries: Botswana, Malawi, Mauritius, Mozambique, Zambia and Zimbabwe across upstream, midstream, downstream, services and process industry clients. Other responsibilities include origination for Corporate and Investment Banking (Investment Banking, Global Markets and Transactional Products and Services). Dezlyn is a CA(SA) registered with the South African Institute of Chartered Accountants and holds a Bachelors of Accounting and Bachelors of Accounting (Honours) degrees from the University of Stellenbosch.