New oil and gas developments in MSGBC region to lower power cost, improve supply

Mauritania and Senegal are positioned to become leaders in regional power generation following the first oil production from the Sangomar project in 2024 and the anticipated first gas from the Greater Tortue Ahmeyim (GTA) project.

In the region historically dependent on imported petroleum for electricity, these new oil and gas developments are expected to lower power costs and improve supply, Energy Capital & Power (ECP) reported on September 23.

Upcoming LNG projects are anticipated to provide fuel to power plants across the MSGBC region as part of national gas-to-power strategies. Senegal’s national electric utility, Senelec, signed a deal with Elton Oil in 2023 to supply LNG for a $120mn regasification terminal in Dakar. Initially, LNG will power the 300-MW West African Energy plant, with later phases supplying remote plants such as Tobene, Kahone, and Malicounda.

Elton Oil’s agreement serves as a temporary solution until domestic gas from Senegal’s Yakaa-Teranga field begins production in 2027, says ECP. Additionally, a 360-MW gas-to-power plant will begin construction in 2024 in the Sandiara Special Economic Zone (SSEZ), sourcing gas from the GTA field. This facility will provide electricity to Senelec under a 25-year power purchase agreement.

As part of Senegal’s natural gas transition strategy, the 120-MW Malicounda power plant, inaugurated in 2023, is a combined cycle plant that will convert from oil to natural gas once local deposits are exploited. Covered by a 20-year power purchase agreement (PPA) with Senelec, the plant has increased Senegal’s electricity generation by 8%, contributing to the goal of universal energy access by 2025. The plant currently has 50 oil-powered generators. The switch to natural gas will lower import costs and support the country’s energy transition targets.

In Mauritania, the Ministry of Oil, Mines and Energy is working with Power Africa to convert the 180-MW Nouakchott North power plant from heavy fuel oil to natural gas. Mauritania plans to use its gas resources from the GTA, BirAllah, Banda, and Tevet fields to fuel this plant and a new 120-MW gas power plant. A deal with Taqa Arabia GoGas will utilise the 2.2 trillion cubic feet (62.3bcm) of gas reserves in the Banda and Tevet fields to power the 180-MW dual plant and provide additional electricity reserves to enhance the performance of the national utility, Somelec.

In 2023, the government of Guinea-Conakry approved an agreement with natural gas service provider West Africa LNG to develop a $300mn LNG import project. This initiative is expected to supply electricity to the country’s utility, Electricité De Guinée, by the first quarter of 2025. The large-scale LNG project will include several receiving terminals, high-capacity regasification units, distribution infrastructure, and gas-fired power plants, with a total capacity of 1.8 GW.

The development of offshore oil and gas resources will not only enhance energy access across the region but also provide affordable electricity to key sectors like mining. Progress is already being made to capitalise on upcoming LNG projects, according to ECP.