NATURAL GAS IN AFRICA AMID A GLOBAL LOW-CARBON ENERGY TRANSITION

The report examines the impact of global decarbonisation on Africa's natural gas sector, distinguishing between existing and emerging producers. It argues that faster global transitions to net-zero emissions will reduce LNG demand and prices, creating 'external' climate transition risks that threaten the viability of future projects. The analysis suggests that domestic demand is an insufficient hedge against these risks due to regulated low prices and the increasing competitiveness of renewable energy. Emerging producers are identified as particularly vulnerable due to weaker sovereign credit ratings and the timing of their infrastructure investments.

• African natural gas producers face 'external' climate transition risks where faster global decarbonisation leads to lower demand and prices, reducing the value of existing industries and damaging the viability of future LNG projects.
• Domestic or regional gas demand is unlikely to serve as a viable economic anchor for new investments because African domestic gas prices are typically regulated or capped and remain significantly lower than global LNG prices.
• Investing in infrastructure to grow domestic gas markets may create 'domestic transition risk,' as low-carbon alternatives and rising long-run prices could make gas uncompetitive before the assets reach the end of their lives.
• Emerging producers (excluding South Africa and Namibia) are more vulnerable to transition risks than existing producers due to weaker sovereign credit ratings and the fact that new investments face higher downside risks and longer payback periods.
• The war in Ukraine has artificially inflated short-term LNG prices; if governments fast-track developments to capture these gains, they increase their exposure to severe long-term risks due to the gap between current valuations and those in a 1.5°C scenario.
• In a Net Zero Emissions (NZE) scenario, global LNG demand could drop by 60% compared to current levels, potentially leading to stranded capacity and stranded value across African assets.

APA

ANWAR, M., NEARY, P., & HUXHAM, M. (2022). NATURAL GAS IN AFRICA AMID A GLOBAL LOW-CARBON ENERGY TRANSITION. Global Energy Monitor. https://globalenergymonitor.org/sites/default/files/migration/reports/ACF-GAS-REPORT-2.0-African-Landscape-Final-Web_3.pdf

Chicago

ANWAR, MUHAMMED, PATRICK NEARY, and MATTHEW HUXHAM. NATURAL GAS IN AFRICA AMID A GLOBAL LOW-CARBON ENERGY TRANSITION. Global Energy Monitor, 2022. https://globalenergymonitor.org/sites/default/files/migration/reports/ACF-GAS-REPORT-2.0-African-Landscape-Final-Web_3.pdf.

Wikipedia

{{cite report |last1=ANWAR |first1=MUHAMMED |last2=NEARY |first2=PATRICK |last3=HUXHAM |first3=MATTHEW |title=NATURAL GAS IN AFRICA AMID A GLOBAL LOW-CARBON ENERGY TRANSITION |publisher=Global Energy Monitor |date=November 2022 |url=https://globalenergymonitor.org/sites/default/files/migration/reports/ACF-GAS-REPORT-2.0-African-Landscape-Final-Web_3.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{anwar2022natural, author = {ANWAR, MUHAMMED and NEARY, PATRICK and HUXHAM, MATTHEW}, title = {{NATURAL GAS IN AFRICA AMID A GLOBAL LOW-CARBON ENERGY TRANSITION}}, institution = {Global Energy Monitor}, year = {2022}, month = nov, url = {https://globalenergymonitor.org/sites/default/files/migration/reports/ACF-GAS-REPORT-2.0-African-Landscape-Final-Web_3.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }