Domestic Gas Could Halve Senegal’s Electricity Prices Next Year
On the cusp of overcoming an entrenched energy shortage, Senegal is poised for expanded electrification and growth through integrated gas value chains
Senegal currently leads the region’s gas rush drive towards gas-to-power developments, with key downstream gas developments to watch in this sector for the coming year
The host of the upcoming MSGBC Oil, Gas & Power Conference and Exhibition 2022 (https://bit.ly/3GV1Kol), Senegal, is in many ways the seat of power in the region: west Africa’s fourth largest economy at $25 billion and projecting 13.7% growth next year, largely due to its booming early-phase energy industry. Furthermore, Senegal’s President, H.E. Macky Sall is Chairperson of the African Union for this year, giving the country robust pan-African influence. The west African country is also a regional leader in power generation and has pioneered a diverse range of transnational downstream projects that light the way for the industry’s inter-connected regional future.
And yet, Senegal’s 17.58 million population still bears the burden of power paucity with the country relying on energy imports for 64% of its grid supply. Moreover, the country’s regionally leading 66% electrification rate displays marked inequities between energy access in urban areas at 88% and in rural communities at just 38%. Energy imports also drive up the price of electricity to almost twice that of fellow west African energy leader, Ivory Coast at $0.227/kWh, further impinging access. The theme of the MSGBC Oil, Gas & Power Conference & Exhibition is The Future of Natural Gas: Growth Using Strategic Investment and Policymaking with good reason. Gas is key to unlocking reliable, cost-effective transitional power for west Africa; it is power that boasts 70% lower emissions than traditional heavy fuel oils; and crucially, gas is power that develops Africa. As the conference will highlight, Senegal currently leads the region’s gas rush drive towards gas-to-power developments, with key downstream gas developments to watch in this sector for the coming year.
Gas Paves the Way
An estimated 2.5 million tons of liquefied natural gas (LNG) expected to be produced in Senegal’s transnational Greater Tortue Ahmeyim (GTA) megadevelopment next year, with LNG already feeding the nation’s power. KARMOL supplies 15% of total demand via a 236 MW floating power plant stationed in Dakar’s harbor —a figure due to be boosted by the arrival of a world-first modular LNG floating storage and regasification unit (FSRU) this month. The unit has been outfitted by GAS Entec expressly for this purpose, with a 300 million cubic feet per day capacity. The unit joins a smaller FSRU that has been feeding the power plant since June, last year. Furthermore, the 130 MW Malicounda-Melec power plant 71km south of Dakar is another promising development; this $167 million facility recently entered into a ten-year guaranteed asset performance agreement contract with Finnish industrial power servicing firm, Wärtsilä for assured, reliable power supply. The plant is set to increase Senegal’s power generation capacity by 17% whilst lowering costs for generation by up to 14%, initially running on heavy fuel oil before transitioning to LNG next year, thanks to Wärtsilä’s proprietary dual-fuel engine technology.
On the horizon, Woodside’s Sangomar megadevelopment has signed gas supply to the country’s national utility company, SENELEC commencing next year at 60-100 million cubic feet per day, joined by bp’s GTA with a further 35 million cubic feet daily. Combined, these gas feeds could generate 600-840 MW of power— three times the amount of that produced by KARMOL’s facilities, fed by the mature Gadiaga field. In addition, the U.S. Agency for Trade and Development is financing feasibility studies for a 144km gas pipeline from the 20 trillion cubic feet Yakaar-Teranga gas field, four thirds the size of GTA. The potential production from this project could power nine gas-fired power plants on the coast, pending final investment decision this year. And, West Africa Energy has developed a 300 MW combined-cycle power plant in Cap des Biches coming online this year and thus set to benefit from upcoming boosts to domestic supply, powering 500,000 homes and providing 25% of the nation’s energy.
With the purchase price of Senegalese gas expected at $5-6 per Million British Thermal Units (MBTU), new gas-to-power projects could more than halve the price of electricity given that heavy fuel oils cost $14 MBTU by comparison. In line with the Emergent Senegal Plan, H.E. Macky Sall, the Senegalese President and African Union Chairperson under whose auspices the MSGBC Conference is being held, has committed substantial resources to achieving universal access to affordable, reliable electricity for Senegal by 2025. Gas has the power to see this goal rapidly and sustainably achieved. Join H.E. President Sall, key industry executives and heads of state from across the region at the MSGBC Oil, Gas & Power Conference and Exhibition 2022 to collaboratively ensure a unified narrative for a gas-fuelled energy transition and to indulge in unparalleled networking opportunities amongst the decision-makers for the future of African power.
Distributed by APO Group on behalf of Energy Capital & Power.
About the MSGBC Oil, Gas & Power 2022 conference:
Under the patronage of H.E. Macky Sall, President of the Republic of Senegal, MSGBC Oil, Gas & Power will once again take place in Dakar, Senegal, with the event serving as a catalyst for investment and multi-sector development in 2022. To find out more visit MSGBCOilGasandPower.com or contact firstname.lastname@example.org.