International Petroleum Transactions and the Development of Gas-to-Power Markets in West Africa OGEL I (2019)

Abstract

This article develops on the premise that - as the emergence of low-carbon and transitional energy markets gain traction globally, the viability and security of gas supply markets are becoming as essential as the need to decarbonise and curb unsustainable practices such as flaring and methane leakages along the value chain. In the Sub-Saharan African context, it is necessary to ensure the reliability of supplies from upstream petroleum production sources as well as promote commercially secure institutional and investment climate of the domestic downstream energy sectors. The paper notes that energy demand in Africa is projected to grow at 3.5% per annum (p.a.) over the next couple of decades, while gas production is expected to increase by 110%. By examining relevant developments in Nigeria and Ghana such as the Offshore Cape Three Points (OCTP) area projects, the Nigerian LNG Project and the West African Gas Pipeline (WAGP) project, this paper discusses the spectrum of international petroleum transactions, legal, policy, and risk assessment issues that underpin gas utilisation and commercialisation in sub-region. It contends that projects designed to support production and supplies must be bankable, thus requiring applicable legal, regulatory and contractual frameworks which are designed to enhance timely investment decisions and effectively mitigate post and pre-completion risks.

Keywords: gas supply, electricity markets, commercialisation, energy regulation, energy policy, West Africa, international petroleum transactions, oil and gas law, petroleum licencing, joint ventures, LNG, pipelines, cross-border transactions, project finance, Nigeria, Ghana

JEL Classification: Q31, Q35, Q38, G24, G28, K12, L51, L94, L95, L98