Building the LNG Fuel Ecosystem in West Africa

Background: The small-scale LNG market is a collection of niche demand segments that serve either stationary energy end-user (industry & residential), or mobile energy end-use (transport), via two products: LNG or CNG from LNG (L-CNG). Several countries in West Africa have targets to reduce consumption of biomass, solid fuels, diesel, gasoil and HFO for transportation, industrial or cooking fuel as a means of both reducing air pollution and the cost of energy. Such current fuel use could be viably substituted with LNG, by using a small-scale LNG business model.

Business proposition: Setting up an LNG-as-fuel value chain in West Africa to substitute current liquid fuel (diesel/gasoil and HFO) consumption of large industrial & residential players, contribute to GHG emission reduction and increase market share, revenues, and margins. The small-scale LNG market has a potential to grow by around 7% p.a. in the next 5 years and generate returns above 15%, driven by both price advantage and environmental benefits when compared to alternative oil products.

Target Market: The market for LNG in West Africa is certainly existing, however, market aggregation and market penetration efforts are certainly needed. Three demand segments can be identified: (i)mining; (ii)power…