Stakeholders in Africa’s oil and gas industry are seeking a different roadmap to reduce carbon emissions.
Key speakers at the African Refiners and Distributors Association, ARDA, conference spoke of the critical need to fully explore huge hydrocarbon deposits to accelerate energy transition for a continent where 60 per cent of the population does not have access to electricity.
The speakers at ARDA’s 2022 conference in Cape Town insisted on the need for progressive measures and ample investments in the energy sector and related infrastructure to reduce carbon emissions in Africa over the next three decades.
“The energy transition is an expression that has to be translated in different ways depending on which part of the world we are in,” Andrea Diani, aftermarket and valves sales leader – Sub Saharan Africa for Baker Hughes, told the audience.
While African population represents currently only 16 per cent of global population and the continent contributes only to 2.73 per cent of global CO2 emissions, forecasts estimate that by 2050 Africa will use as much energy as Europe currently, according to United Nations Climate Change Conference website.
“Growing demand must be met with cleaner fuels,” said ARDA’s executive secretary Anibor Kragha. The priorities were the upgrade of refineries in order to produce cleaner, lower sulfur fuels, the improvement of the supply chains and the focus on natural gas and renewables to produce electricity, according to Kragha.
“Let’s not move to electric cars until we stop using oil to produce electricity in our house,” he also said. “Current global events have prioritized the need for Africa energy security but Africa is unable to leapfrog existing cleaner fuels technology to renewables,” he added.
Over 2020-2030, the focus must be on cleaner transport and cooking fuels, the speakers said.
Refineries should upgrade to produce lower fuels, LPG shall be adopted for clean cooking instead of wood and charcoal, and natural gas should be used in power plant instead of oil and coal.
“We need to unify spec fuels across the continent,” said Dominic Heath, Honeywell AOP’s sales and service director for Africa.
Over 2030-2040, the countries should continue expanding LPG use for clean cooking, regional supply and distribution infrastructure to produce power from gas, as well as develop biofuels, solar and wind.
“Pipelines are much better for the energy transition than trucks,” said Parylum’s business manager Pierre-Henri Masse, S&P Global reports.
Over 2040-2050, power infrastructure will continue to be developed along with proven new energies.
More power infrastructure will need to be built, the use of mature renewable technologies should be expanded, carbon capture should take place and new energy technologies introduced such as hydrogen, ammonia and biofuels, the speakers said.
“Renewable energy is a tool to prevent dependency on volatility of oil prices,” said Assaitou Sophie Gladima, minister of petroleum and energy, Republic of Senegal.
“Oil and gas will remain the main source of energy for many years to come,” said Baker Hugues’ Diani. He added that three hard truths needed to be faced: “without major acceleration, the industry will not meet net zero-targets, the reliance on hydrocarbons will not disappear so efficacy matters, there is no path to net zero without partnership and collaboration”.
Currently, only two countries — Ghana and Benin — in West Africa import only 50 ppm gasoil and gasoline, while others imports fuels with sulfur contents varying between 500 ppm to 5,000 ppm max sulfur, according to industry sources and oil products traders focused on West Africa.
In 2022, 600 millions of Africans had no access to electricity and 900 million had no access to clean cooking, speakers at the conference said.
In Nigeria, state subsidies for the purchase of gasoline have cost no less than Eur27.1 billion over the past 16 years, according to a Le Monde newspaper report on March 22. This money was not used to repair and improve electricity infrastructure, forcing plenty of companies and households to rely on oil-powered generators to ensure continuous electricity supply.
Not only must African states “put skin in the game”, but Western economies need to help finance Africa’s energy transition, and a special fund needs to be created for this purpose, said NJ Ayuk, executive chairman of the African Energy Chamber. “There is no energy transition without justice,” he said.
In the short term, the start of the much talked-about 600,000 b/d Dangote refinery in Nigeria would be “a game-changer,” according to market participants.
However, postponed by many years, the launch of the almost completed refinery is now planned for the end of 2022 but not really expected before the beginning of 2023, according to Africa-based and European-based traders.
If and when it comes online, it will greatly help West African countries to reduce their oil products imports and move to lower sulfur road fuels 10ppm diesel and 10 ppm gasoline.
