Natural gas in Gabon: development strategy

By Jaume FERRER, Investment Strategy and Promotion Advisor of the Government of the Gabonese Republic, and Elsa IZERE, Strategic Analyst.

At the end of 2018, the Gabonese government decided to conduct a study of the natural gas sector – the country has reserves estimated at around 5,000 billion cubic metres – with a stated objective: to strengthen the competitiveness of the various links in this value chain. This study was carried out by a local team composed of staff from the Ministry of Hydrocarbons, the National Agency for Investment Promotion (ANPI) and the General Secretariat of the Government, with the support of the European Foundation for Cluster Excellence.

The resulting strategy consists in integrating natural gas into a diversified energy mix as a « solution » for different markets such as power generation, industry, petrochemistry or export. The development of natural gas in this way will in fact offer a commercial opportunity to operators, create jobs and promote socio-economic and industrial development. The use of natural gas as the basis of the country’s energy mix, alongside renewable energies (hydroelectricity, solar, wind), will also give it a stabilising role in energy supply. In this sense, this natural gas development strategy, approved by the Gabonese government, makes the use of this resource much more than a monetizable commodity.

Using natural gas will also make it possible to develop a policy that is in line with the criteria of the energy trilemma proclaimed by the World Energy Council. The energy trilemma is based on three criteria. The first is to ensure the supply of energy for all the country’s needs. In Gabon, natural gas will provide a stable supply that may increase or decrease depending on weather conditions and the needs and availability of hydroelectric or other renewable energy. The second criterion of the energy trilemma is equity, i.e. the right of the population to benefit from energy at an affordable price. In this respect, natural gas is a cheap resource, significantly cheaper for electricity production than diesel, which is still widely used in the country via power plants powered by this fuel. Converting them to natural gas-fired power plants will significantly reduce the cost of electricity and free up the time needed to build the renewable energy infrastructure that goes with it in the years to come. The third criterion is sustainability and environmental impact. In this respect, natural gas, even if it belongs to the hydrocarbon category, remains much less polluting than diesel.

In addition, the use of natural gas in the energy mix will make it possible to develop the entire value chain beyond extraction, transport, distribution and marketing to storage. This development will have a direct impact on Gabonese society and economy. Moreover, these more favourable energy conditions will strengthen the country’s attractiveness in the eyes of investors, particularly industrial investors.

Finally, in the longer term, once natural gas is well integrated into the energy mix as a stabilizing resource, Gabon aims to position itself as a major energy corridor in its Central African sub-region. A vision of energy supplier to third countries that nevertheless presupposes that internal supply is guaranteed. However, there is no doubt that the efforts driven by this development strategy will contribute to the well-being of the population, to the strengthening of job creation and to the improvement of the business climate.