Natural Gas (NG) - Real-Time Prices

Sub-Saharan Africa Natural Gas Production

Sub-Saharan Africa holds proven natural gas reserves exceeding 300 trillion cubic feet (Tcf), with massive offshore discoveries transforming the energy landscape. East Africa (Mozambique, Tanzania) is emerging as a major LNG export hub, while West Africa (Nigeria) continues to monetize associated gas from oil production.

Major Producers & Projects (2024)

• Nigeria: 1.6 Tcf/year - NLNG trains on Bonny Island, 7th train expansion underway
• Mozambique: 6.8 Tcf reserves (Area 1 & 4) - Coral South FLNG operational, 15 MTPA onshore LNG planned
• Tanzania: 57 Tcf reserves (offshore blocks) - LNG project development phase
• Equatorial Guinea: 139 bcf/year - Atlantic Methanol Company, EG LNG facility
• Angola: 336 bcf/year - Angola LNG plant in Soyo (70% from associated gas)
• Republic of Congo: Associated gas from oil fields, limited infrastructure
• Senegal/Mauritania: Greater Tortue Ahmeyim (GTA) FLNG project - 2.5 MTPA starting 2024

Price Drivers

• Seasonal Demand: Winter heating (northern hemisphere), summer cooling drives volatility
• Storage Levels: US storage inventories signal supply/demand balance
• LNG Arbitrage: Price spreads between US (Henry Hub), Europe (TTF), Asia (JKM)
• Pipeline Constraints: Infrastructure limitations affect regional pricing
• Weather Patterns: Hurricanes disrupt Gulf production; cold snaps spike demand
• Coal-to-Gas Switching: Power generation economics influence demand
• Mozambique Security: Northern insurgency impacts development timelines

Volatility Profile

Exporting Natural Gas from Africa

Natural gas exports occur as Liquefied Natural Gas (LNG) via specialized carriers or through pipelines (limited in Sub-Saharan Africa). LNG requires cryogenic liquefaction at -162°C, reducing volume by 600x.

Nigeria (NLNG - Bonny Island)

• ✓ Export license from Nigerian LNG Limited (NLNG) - Joint venture NNPC/Shell/Total/Eni
• ✓ Gas supply agreement with upstream producers
• ✓ Long-term LNG Sale & Purchase Agreement (SPA) - typical 15-25 year contracts
• ✓ Certificate of Quality (BTU content, impurities analysis)
• ✓ Export duty: 0% (to incentivize gas monetization vs flaring)
• ✓ Taxes: Petroleum Profits Tax (PPT) 50%, Company Income Tax 30% (but capital allowances reduce effective rate)

Mozambique (Coral South FLNG, Area 1 LNG planned)

• ✓ Production sharing agreement with Mozambique government (INP oversight)
• ✓ Export permit from Ministry of Mineral Resources and Energy
• ✓ LNG quality specifications per buyer contract (typically Japanese/Korean standards)
• ✓ Royalty: 10% on gross production at wellhead
• ✓ Additional Profit Tax: Progressive rates 5-35% based on IRR
• ✓ State participation: ENH (Mozambique NOC) holds 10-15% equity in projects

Tanzania (LNG project in development)

• ✓ Model Production Sharing Agreement (PSA) terms under negotiation
• ✓ Government requirement: Prioritize domestic gas supply before exports
• ✓ Proposed LNG plant location: Lindi region (10 MTPA capacity planned)
• ✓ Royalty: Proposed 12.5% on gross production

Importing LNG

• HS Code: 2711.11 (Liquefied natural gas)
• Import Duty: 0-5% (most countries zero-rate energy imports)
• Regasification Terminal: Required infrastructure to convert LNG back to gaseous form
• Storage Capacity: Minimum 2-3 weeks supply at import terminals
• Safety Compliance: IMO IGC Code for LNG carriers, SIGTTO guidelines
• Pipeline Connection: Domestic pipeline network to distribute gas

LNG Carrier Requirements

• Vessel Types: Q-Max (266,000 m³), Q-Flex (210,000 m³), Conventional (125,000-175,000 m³)
• Containment Systems: Moss spherical tanks or membrane tanks (GTT NO96/Mark III)
• Insurance: Hull & Machinery + P&I + Cargo (2.5-4% of cargo value, higher than crude oil)
• Crew Training: Specialized LNG handling certification required (STCW amendments)
• Boil-off Gas: 0.10-0.15% per day (used as fuel for ship propulsion)

Typical Freight Costs

Note: Costs exclude insurance (2.5-4% of cargo value), terminal fees ($0.30-0.50/MMBtu for loading, $0.40-0.70/MMBtu for regasification), boil-off losses (0.10-0.15% daily), and demurrage ($75,000-125,000/day). Winter rates (high demand) can be 50-100% higher than summer rates.

LNG Export Terminals

• Nigeria: NLNG Bonny Island (6 trains, 22 MTPA capacity, Train 7 expansion +8 MTPA planned)
• Mozambique: Coral South FLNG (3.4 MTPA), Area 1 onshore LNG (12.88 MTPA planned - security delayed)
• Angola: Angola LNG Soyo (5.2 MTPA capacity)
• Equatorial Guinea: EG LNG Punta Europa, Bioko Island (3.7 MTPA)

Pipeline Transport (Limited in SSA)

Pipeline infrastructure is underdeveloped in Sub-Saharan Africa compared to other regions. Key projects:

• West African Gas Pipeline (WAGP): Nigeria → Benin → Togo → Ghana (678 km, operational but underutilized)
• Nigeria-Algeria Trans-Saharan: Proposed 4,128 km pipeline (feasibility stage, high political/security risk)
• Tanzania-Uganda: Proposed pipeline from offshore fields to East African markets