As Vladimir Putin’s war in Ukraine continues to intensify and Western sanctions on Russia mount, so the likelihood increases of Moscow retaliating by shutting off its gas supply to European markets.
Such risk is focusing attention on alternative gas producers, notably in Africa. Nigeria, which already supplies liquified natural gas (LNG) to Europe, last month signed an agreement with Niger and Algeria to build a Trans-Saharan Gas Pipeline.
Estimated to cost around $13 billion, it is expected to supply 30 billion cubic metres of natural gas a year and connect with pipelines into Europe. Meanwhile Senegal is set to begin production this year after discovery of 40 trillion cubic feet of natural gas.
As mentioned in our report last week, President Samia Suluhu Hassan has noted increased interest in Tanzania’s gas reserves as a result of Russia tensions. Prospects for gas exports to Europe have been given a boost longer term by the European Union’s decision last month to include natural gas as a “green” energy source in the transition to renewables.
Other commodity producers likely to see increased uptake as a result of the geopolitical tensions include South Africa, which is the world’s second biggest producer of palladium after Russia.
