Senegal, Ivory Coast and Ghana have launched ambitious projects and made bold statements in their bids to become West Africa’s next “energy hub”. These efforts, however, are a long way from unseating dominant Nigeria.

Clotilde Ravel

The permanent deputy secretary of Senegal’s gas and oil strategy strategic steering committee COS-Petrogaz (Comité d’orientation stratégique du pétrole et du gaz), Mamadou Fall Kane, uses every chance he can to present his country as a future “oil, gas and mining” hub. With its Atlantic coastline holding 15 tcf to 20 tcf of recoverable gas resources from the Grand Tortue Ahmeyim (GTA) field, whose production is to be split down the middle with Mauritania, and another estimated 560 million barrels on the Sangomar oilfield, Senegal boasts as the region’s second largest oil and gas potential. Nigeria, with its more than 200 tcf of proven reserves and output of one million barrels per day, far outstrips any of its West African rivals. If it manages to stem its oil theft losses, this figure could even reach 1.8 million bpd.

Marginal producers want their share

Nigeria’s superiority in terms of numbers has not stopped Ivory Coast or Ghana from trying to make their own way in the energy sector. The Ivorian national oil company Petroci and the government have repeatedly spoken of their goal of turning the country into an “energy hub” by 2030. This includes increasing its installed power capacity, particularly via renewable energies, to become an exporter to the wider region. Meanwhile, Ghana has been promoting its “petroleum hub” project, a vast complex designed to boost its refining capacity. It also hopes to become a gas imports leader via its Tema LNG terminal project, though this is now running behind schedule.

Who will take second place?

or now, all eyes are focused on Senegal: Sangomar’s Australian operator Woodside Energy expects to achieve first oil by year-end 2023 and produce nearly 100,000 bpd by 2025. In terms of gas, the partners on GTA, BP and Kosmos Energy, expect to launch the first phase of the gas project in 2024. The aim is to reach an output of 2.5 million tonnes of liquefied natural gas (LNG) per annum, mainly for export to the Asian market. GTA will also supply the domestic gas market with some 35 MMscf/day. This is enough to compete seriously with Ghana, whose continuously decreasing oil output now sits around 150,000 bpd, while (non-liquefied) gas production reached its peak in 2020 with 2.4 million tonnes of oil equivalent produced over the year, for the domestic market only. Though operator Tullow Oil hopes to increase its gas production from TEN and Jubilee fields, the country’s outlook is far from encouraging. It has struggled to attract new investors and has begun to be seen as an “oil no-go zone”, in no small part on account of the Ghanaian authorities’ attitude towards operators, particularly Eni.

Ivorian assets?

This ramp-up of oil and gas projects across West Africa is also doing favours for Ghana’s long-time rival, Ivory Coast. The neighbours had fought a lengthy battle over their maritime border, which was settled in favour of Ghana by the International Tribunal for the Law of the Sea in Hamburg in 2017. Though this meant Ghana did not lose any offshore reserves to Ivory Coast, the losing party has since recovered: in September 2021, ENI made a discovery of 1.5 billion barrels and nearly 2 tcf of estimated gas reserves on the Baleine field, offshore Ivory Coast. The Italian major hopes to reach a plateau phase on Baleine of around 100,000 bpd between 2025 and 2026.

This is especially good news for the country. The associated gas of production from Baleine will be used to supply Ivory Coast’s power plants. It is precisely through electricity production that Ivory Coast hopes to do well on a regional level. President Alassane Ouattara has made it one of his priorities and the authorities regularly applaud their efforts in this area, claiming that the country’s installed capacity increased by 60% between 2011, when Ouattara came to power, and 2019, to sit at 2,300 MW and cover 100% of the country’s needs. However, its overly zealous goal is to reach 4,000 MW in 2025, then 5,000 MW in 2030, and become an exporter of electricity to its neighbours.

Refining, the poor relation

Taking a parallel approach, Ghana wants to focus on increasing its refining capacity and become a vital link in the region’s oil and gas supply. Although it only has one refinery in operation, the Tema Oil Refinery with a capacity of 28,000 bpd, the plan is to build three more for a capacity of no less than 300,000 bpd each. Petroleum Hub Development Corp, run since 2021 by former Deloitte consultant and finance ministry advisor Charles Owusu, is in charge of developing the three processing plants in Bonyere, Jomoro. It is estimated to cost some $60bn. The Ghanaian state, which is currently sitting on $55bn of debt, says the project will be private sector-driven.

Ghana’s 100,000 bpd Sentuo oil refinery expects to commence production mid-2023. A visit by Offshore Africa to the Tema site confirms the project is on course. The entire African continent has not had a new refinery built since 2011, when China’s CNPC built the Djermaya refinery in Chad. Competition from India’s vast capacity of over 900,000 bpd makes any new structure difficult to make viable, even when taking into account transportation costs. Instead, African states regularly conduct upgrades on their existing infrastructure. Ivory Coast’s state-owned Société Ivorienne de Raffinage is currently working to expand its annual refining capacity of 3.8 million tones of crude oil. In Senegal, Technip Energies has been successful in increasing Société Africaine de Raffinage’s volumes from 1.2 million tonnes per year to 1.5 million tonnes, meeting 70% of local demand.

The missing Tema LNG

On top of its refining goals, Ghana wants to import LNG to add substance to its talk of becoming a future West African oil hub. But what is to be the region’s first import terminal, Tema LNG, is running behind. Although the facility itself is reported to be operational, Shell is yet to deliver its first cargo. That has not stopped its owner, Tema LNG Terminal Co, from looking to the future: wanting to export its gas throughout the region, it established Ecow-Gas to build and operate storage and regasification units needed for future gas deliveries. Ivory Coast had laid plans for a similar import terminal project in 2016, but this was abandoned by its operator TotalEnergies due to issues around profitability.