Nigeria to start supplying gas to South Africa from 2024.

Riverside LNG, a Nigeria-based energy company, has revealed ongoing discussions regarding a possible deal to supply gas to South Africa from the first quarter of 2024.

This would be the first agreement of its kind between the two countries, demonstrating potential collaboration in the energy sector.

Earlier this year, the company signed a gas export partnership agreement with Germany's Johannes Schuetze Energy Import AG. CEO David Ige, in an interview in Abuja, expressed the company's current search for new agreements on the continent.

Nigeria has Africa's largest gas reserves

"We would probably close very early in the year another segment of the market, a buying market for South Africa,

"There is an evolving gas market in the region, which extends to around 5000 Km offshore Nigeria. So that covers Southern Africa, West Africa, all the way to northwest Europe, as well as the Caribbean and South America in general," said Ige.

Meanwhile, Ige has refrained from divulging any further information on discussions with its South African counterparts, citing confidentiality clauses. In addition, the company is actively studying potential opportunities in Liberia and Cameroon.

What you need to know

South Africa is currently grappling with persistent power shortages, as aging, poorly maintained power stations run by financially troubled utility Eskom Holdings SOC Ltd. falter in the face of rising demand. Attempts to source additional power from private suppliers are encountering delays caused by grid constraints and legal disputes.

South Africa currently has no facilities to receive LNG. Deliveries from the project won't begin until 2027, so there's "plenty of time for the import terminal infrastructure", said Ige.

The country relies on coal for 80% of its electricity production. However, given the likely lack of investment in this sector, there is a move towards renewable sources. The aim is to achieve 60 gigawatts of electricity from renewable energies by 2030.

The 16-member Southern African Development Community has approved a $17 billion plan for natural gas infrastructure. The initiative aims to improve the region's energy supply by approving investments in pipelines and terminals for local and imported supplies.

"Many of these countries are considering turning to gas. We see a huge opportunity for Nigeria in becoming a commercial hub," added Ige.