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International Gas Union sets focus on Africa’s gas realms

Khaled Abubakr speaks to Ian Lewis about the growing importance of Africa’s gas

Support to member states in Africa and the recruitment of new members on the continent is now a major focus for the International Gas Union (IGU), according to Khaled Abubakr, the institution’s Middle East and Africa Regional Coordinator.

The IGU currently has 11 charter member states in Africa – Algeria, Cameroon, Egypt, Equatorial Guinea, Libya, Morocco, Nigeria and Tunisia in North African and Angola, Gabon, Mozambique and South Africa in the sub-Saharan region.

The spotlight is now firmly on southern and eastern Africa, where large recent gas finds in Mozambique and Tanzania have put the region on the radar for energy firms and investors.

Abubakr told Petroleum Economist that Africa was the region least well represented within the IGU and that greater participation on the continent was vital if countries new to the gas sector were to avoid mistakes made by others.

Moves to promote more activity in Africa have been fostered by the outgoing Malaysian presidency of the IGU and are expected to be accelerated by the new French leadership.

Priority

“The IGU board is asking for more concrete steps on Africa,” says Abubakr. “There is a huge amount of information and experience within IGU committees and companies that are available to share with African countries.”

African initiatives are expected to be one of the main topics up for discussion at the IGU Council meeting to be held late in 2013. In particular, the IGU is eager to encourage African countries to use gas to promote economic development at home, as well as exporting it.

That means avoiding the model adopted thus far in Nigeria, which has exported virtually all of its gas as LNG, rather than using it domestically. Plans to change that situation have been investigated by Nigeria, but have yet to be implemented.

The union is talking to institutions with an interest in Africa, such as the United Nations and the World Bank Group, to coordinate efforts in the energy sector.

Assistance is already being provided to member and non-member states in the region. For example, the IGU has been offering guidance to Ghana on the development of the West African Gas Pipeline, and on the potential of combined cycle gas turbine reactors as efficient, low-carbon emissions power generators.

As the chief executive of Egyptian energy firm Taqa Arabia, Abubakr is well placed to understand the issues surrounding the gas industry in Africa, given the company’s hands on experience at the sharp end in gas production and distribution, the natural gas vehicle sector and renewable energy production.

It already has a presence outside its core Egyptian market in the Middle East and Africa, including a 44 megawatt-power station in Sudan. But it has now embarked on a strategy to diversify further into North and East Africa to lessen its dependence on Egypt, where political uncertainty continues to cloud the outlook for businesses there. The company had to postpone an initial public offering last year, when the Arab Spring uprising broke out in Egypt.

Abubakr is optimistic about the potential of the gas sector in East Africa for companies such as Taqa Arabia. “We believe Africa is going to be the global boom region in the coming 20 years – there is going to be economic growth, investment growth and consumption growth,” he says. “It is a wonderful opportunity for companies like ours to be in these markets.”

Taqa Arabia is currently looking at possibilities in power generation and distribution in Rwanda, Kenya and Uganda, as well as potential projects in Morocco and Tunisia.

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