Sahara Group to invest $ 1 billion in cooking gas ships, terminals in Nigeria and more in five years

Pierre Uzoho

The Sahara Group, an energy and infrastructure conglomerate, has announced that it will invest more than $ 1 billion to improve access to liquefied petroleum gas (LPG) in Nigeria and some other African countries and economies emerging markets through its subsidiary, WAGL Energy Limited.

The group explained that this decision was part of the means by which it wishes to stimulate the energy transition on the continent.

Sahara Group Executive Director Mr. Temitope Shonubi revealed it in South Africa, during the 2021 African Refiners and Distribution Association (ARDA) conference, where he spoke about the role of LPG in Africa’s energy transition.

“The Sahara, through its subsidiary, WAGL Energy Limited, is already investing $ 1 billion to increase its LPG fleet and terminal infrastructure over the next five years. In addition to the fleet of ships, Sahara is building more than 120,000 metric tonnes of LPG storage in eleven countries, ”he said in a statement.

According to him, the countries planned for the storage tanks which include Nigeria, Senegal, Ghana, Ivory Coast, Tanzania and Zambia, whose process has started and five others in the preliminary stage

Shonubi said that Sahara continues to lead efforts for a smooth energy transition in Africa through innovative energy solutions through its upstream, middle, downstream and downstream energy activities, including partnerships with the United Nations Program for Africa. development (UNDP) and other leading organizations.

He noted that Africa had become dependent on imports to meet its demand for LPG due to the low capacity to refine crude oil and the lack of adequate wet gas processing.

He said: “Africa’s refining capacity of 3,343,000 barrels per day is limited to just 20 countries; utilization rates have increased from around 75% in 2010 to 55% in 2020. Only six African countries have a combined LPG storage capacity greater than 50,000 tonnes.

“Economic progress is essential to harness the latent demand for LPG in Africa to boost economic performance. “

The executive director lamented, however, that Africa accounted for only four percent of global LPG consumption last year.

THISDAY understands that LPG consumption in Africa is low compared to other markets. Africa’s consumption was 14 MT (which translates to 12 kilograms per person) in 2020, compared to 108 MT for Asia-Pacific ((27 kg / person), North America 74 MT (123 kg / person), from Europe to 49 MT (49 kg / person), from the Middle East 38 MT (60 kg / person) and 34 MT from Latin America (53 kg / person).

Shonubi attributed the low LPG consumption in Africa to the barrier of affordability, the lack of large-scale LPG storage infrastructure, the minimal number of dedicated vessels for the region, the low cost of installation. firewood and kerosene stoves, as well as negative perceptions and fear of explosions due to poor safety standards, among other factors.

“Although installation costs can be high, LPG is more energy efficient than kerosene and firewood, and its sulfur content is practically zero. LPG is essential to achieve the United Nations SDG 7 – Sustainable Development Goal of universal access to energy, ”said Shonubi.

He said converting just 30% of Africa’s car fleet to LPG would result in an annual savings of $ 3 billion in fuel costs and around $ 40 billion in CO2 emissions reductions, while the indirect cost savings of the health and infrastructure would exceed $ 15 billion per year.

Regarding the role of African governments in encouraging adoption of LPG, Shonubi called for a favorable policy environment to foster adequate private sector involvement and sustainability.

He said that funding should be channeled to nationwide investment programs while megaprojects and regional integration should be accelerated in order to effectively serve a larger population and develop the economy of several countries. .

He also advocated increasing LPG consumption in Africa, through investments in LPG infrastructure and funding the use of LPG through credit, pay-as-you-go, penalty programs. for emissions, reward for reductions in global warming and inclusion of bio LPG, among others.

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