Africa set to switch on gas-to-power potential
By Joe Brock
This is prompting a fresh look at using gas domestically.
RISING POWER
Gas is becoming profitable enough to tempt energy firms but remains cheaper for consumers than oil for power generation.
"We believe surging domestic demand coupled with growing regulatory changes take the economics of sub-Saharan gas to a new level," Rencap said in a research note this month.
There remain major hurdles, including implementing commercial gas pricing, building expensive infrastructure and working alongside competing LNG projects.
CHALLENGES
Progress on reforms has been slow and government projections to increase power output tenfold by 2020 are unrealistic but changes, including lifting domestic gas prices, are in motion.
"It has taken two years for privatisation to progress and we're starting to see the benefits. This year has been the turning point," Ladipo added.