The milestone underscores the pivotal role of natural gas in Africa's development.
The Bipaga Gas Processing Center in Cameroon has successfully delivered its inaugural gas shipment to the Keda Ceramics manufacturing facility through a 6-kilometer pipeline constructed by Société Nationale des Hydrocarbures (SNH), the national oil company, and Perenco, an independent hydrocarbon producer.
As the largest ceramics facility in the region, Keda Ceramics will utilize the supplied gas to power its factory generators and kilns, enabling the production of approximately 20 million square meters of ceramic tiles upon the facility's full commissioning.
The African Energy Chamber (AEC), representing the African energy sector, acknowledges the significant milestone achieved by Perenco and the government of Cameroon. This project marks the first gas-to-industry initiative led by Perenco in Central Africa, demonstrating the crucial role of natural gas in driving industrialization across the region.
The successful delivery of this project underscores the potential of gas production and monetization to support domestic manufacturing, job creation, and economic growth in Cameroon. It heralds a new era of expansion and prosperity for the Cameroonian economy.
Cameroon is working towards establishing itself as a manufacturing center by focusing on industrialization through the implementation of natural gas projects. The country's Industrialization Master Plan, which was approved in 2016, sets out a roadmap to position Cameroon as a key regional electricity provider, a supplier of agro-industrial products, and a leading equipment manufacturer.
The Keda Ceramics project is part of this initiative. Once the factory is fully operational, it will use up to six million cubic feet of gas per day to fuel its activities, leading to the creation of 2,000 direct and indirect jobs in the Kribi region. The gas supply is secured through a 20-year agreement signed in September 2022 with Perenco and SNH.
This project is one of several initiatives underway to enhance gas monetization in Cameroon. In terms of LNG, Cameroon aims to increase production from the current 1.6 million tons per annum (mtpa) to five mtpa by 2026. Cameroon holds the distinction of being the first country in the world to successfully convert an LNG carrier into an FLNG vessel.
The Hilli Episeyo FLNG facility, developed through a collaboration between LNG manufacturer Golar LNG, Perenco, and SNH, achieved a significant milestone by delivering its 100th cargo in 2023. Currently, the project partners are engaged in discussions to extend the contract for the FLNG vessel beyond its current expiration date in July 2026.
In addition to its LNG production, Cameroon has set a goal to increase the utilization of LPG for clean cooking purposes to 58% by the year 2035. To achieve this objective, the country is actively seeking investments in midstream and downstream infrastructure. Currently, the Société Nationale des Hydrocarbures (SNH) operates a domestic gas depot in Bipaga, serving as the sole supplier of locally-produced LPG.
Cameroon's LPG Masterplan, launched in 2016, outlines a comprehensive strategy for expanding LPG usage. The plan envisions an investment of 400 million euros to fund the procurement of an additional seven million LPG cylinders nationwide. This initiative will be complemented by enhancements to importation, storage, transportation, and retail infrastructure.
In the power sector, natural gas projects play a crucial role in bolstering electrification and driving economic growth. The Kribi Gas-Fired Power Plant, operational since 2013, has a substantial capacity of 341.3 MW and is strategically located in southern Cameroon. This project utilizes natural gas sourced from the Sagana South offshore gas field, providing the region with a reliable and environmentally friendly source of power.
Cameroon is actively seeking new investment opportunities in exploration and pursuing alternative methods to monetize untapped reserves. In January 2024, Tower Resources, an independent oil and gas company, successfully extended the initial exploration period of the Thali PSC in the Rio del Rey basin. This contract stipulates the drilling of one exploration well. With an estimated potential of up to four distinct play systems, the Thali prospect presents exciting possibilities for additional discoveries.
Furthermore, in June 2023, Perenco entered into a new 20-year PSC agreement with SNH, ensuring the continued development of the Rio del Rey Basin. This basin holds approximately 1.2 billion barrels of undeveloped reserves. By promoting further exploration across the market, Cameroon aims not only to augment its national oil and gas production but also to bolster industrialization initiatives throughout the country.
“Cameroon is setting a trend for other resource-rich nations in Africa that are seeking innovative solutions to advance industrialization. By directing investment towards gas processing and distribution while promoting new exploration to sustain supplies, the country is fast-tracking the development of multiple industries country-wide. Gas is a fuel for industrialization in Africa and Cameroon is a testament to this,” states NJ Ayuk, Executive Chairman of the AEC.