Russia to Expand Energy Footprint in Africa as Europe Snubs Its Gas
© Photo : Gazprom Neft
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As the EU drastically reduced its gas imports from Moscow following the escalation of the Ukraine crisis, and with Russian gas pipeline flows to Europe remaining historically low, Africa has been eyeing natural gas as a promising direction of cooperation with Russian energy companies in order to become an energy self-sufficient continent.
Russia is mapping a mutually beneficial energy relationship with African nations, while Europe continues to snub Moscow's gas as part of self-harming sanctions.
Russia's pipeline natural gas supplies to the European Union dropped by 72 percent year-on-year to 14.1 billion cubic meters (bcm) in the first seven months of 2023, the Gas Exporting Countries Forum (GECF) said in its monthly report. The total volume of gas imports to the EU amounted to 90 billion cubic meters, a decrease of 32 percent compared to the previous year, according to the report. Norway remained the main supplier of pipeline gas with 50.7 billion cubic meters, or a 56% share.
After Russia began its special military operation in Ukraine, the West actively searched for ways to limit Moscow’s energy-related income, notably from oil and gas. The effort culminated with a $60 price cap imposed by G7 member states and Australia on December 5. In response, Moscow banned the supply of Russian oil and petroleum products if contracts directly or indirectly provide for a price cap.
Since then, Russian pipeline gas gradually stopped flowing to more than 15 countries. The much-hyped sanctions cobbled together by the West to “cripple” the Russian economy since 2022 have backfired on those fuelling NATO’s proxy war against Moscow in Ukraine. As a result, Western countries are facing everything from raging inflation, recession fears, to looming de-industrialization.
Russia's Pivot to Africa & What it Offers Continent
On the other hand, African nations are looking at the various potential vectors of energy cooperation with Russia - a 100% energy self-sufficient country. Africa sees natural gas as a means of finding solutions to the continent’s energy crisis. As the countries of the Global South shake off the remaining vestiges of their colonial history, they are looking to assistance from Russia in making energy poverty a thing of the past.
Thus, Russia and South Africa are discussing joint projects in the energy sector. Russian Deputy Energy Minister Sergey Mochalnikov met with South African Ambassador to Russia Mzuvukile Jeff Maqetuka shortly before a BRICS ministerial meeting on energy in Johannesburg. The two sides discussed current Russia-South Africa cooperation in trading in oil and oil products.
But in a new development, they spoke about the planned construction of a gas power plant in South Africa, and supplies of Russian liquefied natural gas (LNG) for new generating capacities, the Russian Energy Ministry recently said in a statement.
"Our countries are interested in developing mutually beneficial cooperation in the energy sector. Today, we are working out with our South African partners the possibility of building a gas power plant. We are already discussing the supply of equipment, the possibility of organizing the supply of Russian LNG for effective operation of new generating capacities," the Russian deputy energy minister, Sergey Mochalnikov, was quoted as saying.
According to Mzuvukile Jeff Maqetuka, the South African envoy, his country is ready to discuss agreements with Russian private and state companies on a concession basis - in other words, granting the right to own or profit from the construction or operation of an object. This type of agreement has long been practiced around the world, especially when a state has, for example, rich mineral deposits, but there is no opportunity - most often financial - to develop them on its own. In this case, Johannesburg would get a stable source of generation, while the Russian side would receive an opportunity to sell electricity directly to the domestic market of South Africa.
The meeting also raised the issue of increasing electricity consumption in South Africa, which requires the development of generating capacities. Specifically, the sides chewed over prospects for further cooperation in the electric power industry, noting in particular that the implementation of Renewable Energy Sources (RES) projects by Russian companies in South Africa is proceeding in line with the plan. The operation of coal-fired power plants in South Africa, which are currently operating at half the available capacity, also came up for discussion.
Just six months ago, on the sidelines of the second Russia-Africa Summit and Economic and Humanitarian Forum in the Russian city of St. Petersburg, Executive Chairman of the African Energy Chamber NJ Ayuk told Sputnik that about 80 percent of the population in Africa as a whole does not have access to electricity.
"I think gas is going to be something that is so promising, huge amounts of gas reserves that have been discovered and that need to be brought into development especially in Nigeria and Congo... [We are] looking at gas, developing gas, not just for export but for domestic use, making energy poverty history and driving a gas-based economy to really improve people's lives," Ayuk said.
Expressing confidence that Africa could become energy sustainable, the African Energy Chamber executive chairman added:
"We will continue to meet with Russian companies, encourage them to continue to invest in Africa and to partner with Africans on projects that would alleviate energy poverty."
28 July 2023, 07:18 GMT
In June, Russian energy giant Gazprom said it was "open to discussing constructive proposals" from African nations and ready to offer them its experience and technology.
"Wider use of natural gas will help Africa solve a number of problems, from economic to social and environmental ones. We are confident that it is essential for Africa to discover all the advantages brought about by this type of fuel. We see potential in cooperation with African countries and we can offer them our unique expertise and our experience in technology," Gazprom department head Dmitry Khandoga was quoted as saying.
Speaking during an international roundtable, titled "The Benefits of Natural Gas for the Population and the Economy" held in Johannesburg, South Africa, Khandoga added that Gazprom hoped that mutually beneficial proposals could "facilitate economic development and improve the lives of people in African countries." According to Gazprom's statement, Africa will generate over 60 percent of the global population growth by 2050, as per expert estimates. The continent's subsequent economic growth will come with a two-fold increase in energy consumption, resulting in a demand for natural gas anticipated to increase by 2.5 times.
Africa Becoming 'New Center of Power'
Overall, as Moscow has recently been increasing its presence in the Global South, 2023 has been marked by the further intensification of Russian-African cooperation. Africa is among the focuses of Russia's new foreign policy concept published in March, 2023.
A flurry of visits by Russia's Foreign Minister Sergey Lavrov to Africa have taken place over the past year, holding talks in Burundi, South Africa, Angola, Mozambique, Uganda, and other nations.
Meanwhile, Moscow played host to the Second International Parliamentary Conference “Russia-Africa” in March. Furthermore, the Second Russia-Africa Summit and Economic and Humanitarian Forum took place in the Russian city of St. Petersburg on July 27-28. Russian President Vladimir Putin said at the gathering that Africa was becoming "a new center of power," and its "political and economic role is growing exponentially. And everyone will have to reckon with this objective reality."
Furthermore, the 15th summit of the BRICS group will also be coming at a time when they are leading the drive towards a multipolar world order, intent on challenging the traditional Western dominance. Hosted by South Africa, as rotating chair of BRICS, on August 22-24, 2023, it will be held under the theme: “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism.” This is a nod to how the bloc is determined to build ties with the continent, which is shaking off the vestiges of a colonial past, seeking to control its own resources, become self-sufficient, and chart its own future.
The heads of state or heads of government of the five member states will be attending the BRICS 2023 Summit: President Cyril Ramaphosa of South Africa, China’s President Xi Jinping, Brazil’s President Lula da Silva, and Indian Prime Minister Narendra Modi. Russian President Vladimir Putin is expected to participate in the summit via video link.
BRICS enlargement is high on the agenda and will be discussed at the upcoming summit of the group in South Africa, Kremlin spokesman Dmitry Peskov said ahead of the gathering. Over 40 countries have expressed their desire to join the group of nations, which has already been outperforming the G7, with 23 of them having done so officially, according to South Africa's top diplomat Naledi Pandor.
