Sports

You think West Africa’s (liquefied natural gas) LNG-to-power projects are lingering? Zoom in on Benin

By Mickael Vogel, Director of Strategy

With a population of less than 12 million and a GDP of $10.35bn in 2018, Benin is

often overshadowed by its massive neighbour, Nigeria. Yet as African countries try to

revitalize their energy sector, bring in private capital and develop gas-to-power, it is

in West Africa and Benin that observers should look for positive developments. With recent

legislative reforms and a strong political will, the small West African nation is

strengthening its place as the capital of the West African Power Pool (WAPP) and

positioning itself as a big hub for gas and power in the sub-region.

On July 24, French super-major Total signed a Gas Supply Agreement and Host

Government Agreement with Benin and its state utility, the Socieacute;teacute;

Beacute;ninoise d'Energie Electrique (SBEE). The agreement will see the development of a

0.5 mtpa Floating, Storage and Regasification Unit (FSRU), the first in West Africa. LNG

supplies sourced from Total's global portfolio are set to start in 2021 and last for 15

years.

This is no small move for a region that has repeatedly tried to develop its gas-

to-power infrastructure but has remained faced with financing, infrastructure and

regulatory challenges. Between Cote d'Ivoire, Ghana, Nigeria and Senegal, up to 7,750MW of

gas-to-power facilities could be installed by 2030 according to Power Africa. In practice

however, erratic supplies from the West Africa Gas Pipeline, lack of gas and transmission

amp; distribution infrastructure, unattractive pricing structures and outdated master

plans mean that such potential might remain under-exploited.

In this context, the recent signing of agreements with Total brings hope to a

region hungry for power. It is first the result of strong political will. Under the

leadership of President Patrice Talon, Benin has been implementing a strong Government

Action Plan (PAG) since 2016 which places the revitalisation of the country's energy

sector and private sector capital as a pillar of economic development. The formula is

working: Benin grew by almost 7% last year and is expected to grow by 6.5% this year

(IMF), placing it in the top 15 of the world's fastest growing economies. And political

vision has led a better ease of doing business. Benin has been revising its Electricity

Code, and its Council of Ministers approved last month the new framework of intervention

for the Independent Power Producers (IPPs), improving investment and operating conditions

for private investors in the country's power industry.

As a result, the agreement with Total will not only see the development of West

Africa's first FSRU, it is also reviving hopes of seeing clean LNG powering future homes

and industries across the region. The new gas import project will indeed supply power

plants in Benin, such as the new 127 MW power station at Maria Gleacute;ta, with

regasification infrastructure developed and operated by Total.

Source: Centurion Law Group.Sub-Saharan Africa has a current installed gas-to-

power generation capacity of about 18,000MW, 70% of which is in Nigeria. Based on known

reserves there is potential for approximately 400GW of gas-fed power generation capacity

in sub-Saharan Africa, with potential developments for 16GW by 2030. According to Power

Africa, such additional gas-to-power capacity would require an investment of $113bn in

infrastructure, $35bn in demand and $28bn in supply. With a dedicated team of lawyers and

experts in gas amp; power, Centurion (CenturionLG.com) stands ready to assist regulators,

developers and financiers in making this ambition a reality.