Underpinning the appeal of east Africa is demand for liquefied natural gas in the Asia-Pacific region, which according to Bernstein Research is growing at 20 per cent year on year.
That is part of a strong global picture. Bernstein expects demand for LNG to nearly double over the next decade to 408m tonnes a year.
Bernstein says LNG’s rising fortunes are driven by three factors: the effects of the Fukushima disaster, which encouraged Japan to switch from nuclear to gas; a long-term increase in European demand as North Sea supplies decline and countries such as Germany back away from atomic power; and the emergence of LNG buyers in China, India, the Middle East and Latin America.
China is planning to start up three LNG import terminals this year as tighter environmental standards contribute to a shift from coal in power generation. Bernstein expects China to become the second largest importer of LNG by 2020, after Japan.
Frank Harris, LNG analyst at Wood Mackenzie, pointed out that countries such as Malaysia and Indonesia, which had been exporters of LNG, were importing it as their reserves declined.
Another wild card, he said, was the Middle East, where Dubai and Kuwait had emerged as big LNG importers.
“When you put all that together, we certainly think there’s room for significant volumes from Africa,” he said.
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