The recent agreement to develop what has been described as South Africa's largest liquefied natural gas (LNG) project in Mpumalanga province highlights the potential of natural gas as a viable energy source for the country.

This agreement, a "non-binding term sheet," is a partnership between South Africa's Industrial Development Corporation (IDC) and Afro Energy, a subsidiary of Australian gas explorer Kinetiko Energy. The initiative is projected to generate 50MW of equivalent energy initially, with plans to expand to 500MW over time. There are also options for the development of further LNG gas equivalent projects.

This deal comes at a time of renewed interest in onshore gas, as South Africa continues to grapple with a power crisis. TotalEnergies has received approval to search for oil and gas off South Africa's west coast, and in May, the South African government announced plans to revisit the idea of shale gas exploration in the Karoo region.

While the Mpumalanga discovery is relatively advanced and involves an innovative public-private partnership approach, the estimated resource of 3.1 billion cubic feet of natural gas is modest compared to the vast gas reserves found in other parts of Africa.

Africa's natural gas reserves are estimated at around 620 trillion cubic feet, with the largest resources located in Nigeria, Algeria, and Senegal. Algeria, due to its proximity to Europe and well-developed LNG infrastructure, currently serves as Africa's largest exporter of natural gas and the fourth-largest gas exporter globally, boasting the 10th largest proven natural gas reserves worldwide.

As Europe seeks to reduce its reliance on Russian energy following the conflict in Ukraine, North and West Africa are well-positioned to step in. Established trans-Mediterranean gas pipelines can facilitate this transition, with several more pipelines in the planning stages. While challenges such as supply bottlenecks and political issues need to be resolved, the potential for African oil and gas exports to Europe is substantial.

Natural gas is often considered a "transition fuel" that can facilitate the shift from oil and coal to renewable energy sources. It is considered a cleaner-burning and efficient fuel with lower carbon dioxide emissions compared to other fossil fuels. Additionally, natural gas can be easily compressed, liquefied, and stored, giving it an advantage over intermittent renewable sources like solar and wind, which require additional technologies for energy storage and dispatchability.

Gas resources can be integrated into the global natural gas infrastructure through pipelines and international shipping, allowing newly developed gas fields in frontier regions like South Africa to quickly supply gas where needed.

Ghana's experience serves as an example of what is achievable. The country's oil and gas industry began with its first discoveries around 2006 and produced its first product within 40 months. In 2021, Ghana produced 2.4 million metric tons of gas.

Balancing the imperative to reduce global greenhouse gas emissions to meet climate commitments with Africa's development needs is a critical challenge. Nearly half of Africa's population still lacks access to electricity. The Africa Energy Commission recognizes the role of natural gas in the continent's evolving energy mix.

In a global context where Africa is responsible for only four percent of global carbon emissions, and the majority of its population relies on biomass for energy, a transition to natural gas would represent a net improvement.

On the global stage, there is a growing demand for natural gas. Africa, with its vast resources, has an opportunity to play a significant role in meeting this demand.