The sharp curve of energy market, beginning with the Russian invasion of Ukraine, has led European countries to seek to reduce their dependence on Russian gas and oil. According to International Energy Agency (IEA) datas, European Union (EU) purchased 155 billion cubic meters (bcm) of Russian gas in 2021. 45% of the EU’s gas imports and approximately 40% of the total gas consumption are provided by Russia.[1]
After the eruption of war in the east of Europe, EU members have decided to place sanctions on Russian energy export which means the main source of its income, by aiming to lessen to affordability of war by Moscow. Thus, EU authorities have announced that they will reduce natural gas imports from Russia by two-thirds within the next year. To achieve this goal, member states have agreed to decrease gas usage by 15% by the end of 2022.
Despite setting such a target by the EU, current conditions in the energy markets that gas prices are soaring, allowing Moscow to be less affected by sanctions contrary to expectations. Since the beginning of the war, Russia has exported 46 billion euros worth of energy to the EU, and also, its revenues from energy sources have continued to increase. Energy income of Russia is roughly double the amount of sales in the same period of 2021. [2]
EU countries have gravitated towards alternative energy sources due to their failure of attaining the objectives of sanctions, escalating energy prices and also to reduce dependency on Russia. However, there are certain concerns about where these alternative sources will come from. Because the fastest solution to the energy crisis is supplying liquefied natural gas (LNG) from other states, especially Qatar and the USA but this situation creates some issues due to the lack of LNG facilities in Europe, notably in Germany.
Based on their reserves and investment-friendly production capacity, African countries has occurred as the first choice for energy diversification. The withdrawal of Russian energy from the European market is supposed to mean a greater share for African energy producers. Additively, Europe is on a quest for fulfilling the “energy gap” in a short span of time. This gap has the meaning for a bigger room for African gas than ever before, which is particularly liquefied natural gas that is easy to stock and transport.
On the African continent, Nigeria has the largest proven gas reserves, followed by Algeria, Senegal, Mozambique, and Egypt. [3] Therefore, although it has been on the agenda with energy projects for a long time, Africa, which could not achieve any concrete output, become the winning side of the Russia-Ukraine War and begin to take part in the energy picture in European. About 3 months after the breakout of the war, Germany’s Chancellor Olaf Sholz made a visit to Senegal on May 22, 2022, to ensure a stable natural gas supply from the countries’ offshore projects. [4]
Italy is a leading European country with its eyes on African resources. Roma has negotiated with Algeria for additional natural gas supply in 2022 and announced that it expects the country to continue to provide extra capacity after 2022. Moreover, more comprehensive agreements are being negotiated with Angola, Egypt, and the Republic of Congo. [5] In this context, it can be said that Europe considers Africa not just as a quick solution to the current gas gap, but also as an actor with a significant role in the future energy game.
In an exclusive interview, Deputy Director-General for Energy of the European Commission Matthew Baldwin who is the newly appointed Deputy Director-General of the EU Energy Platform Task Force (EPTF), which is constituted for reducing Europe’s dependence on Russian oil and gas, has expressed Nigeria’s enthusiasm for its contribution to the EU’s gas supply. Baldwin made the following statements:[6]
“We can no longer count on the gas coming from the Russian Federation and we want to build a new partnership with African countries like Nigeria with whom we have an already well-established partnership to obtain more gas and LNG from you on good commercial terms”
In light of Europe’s enthusiasm for energy imports and Africa’s geographical proximity to Europe, this continent stands out as an ideal candidate for European supplier diversification. In addition, African countries, which are traditionally gas suppliers to Europe, have favourable conditions to increase their exports. Pipelines connect African countries to the wider European gas grid across the Mediterranean. Existing pipeline exports from the continent to Europe extend via the Medgaz Pipeline to Spain via Algeria, from Libya to Italy via the Trans-Mediterranean Pipeline (TRANSMED) and from Libya to Sicily via the Greenstream Pipeline.
One of the most reasonable options for Europe is the increase energy supply from Africa to EU by improving the existing pipelines. In this regard, forward-looking new Technologies and changing geopolitical conditions make it easier for African countries to the preservation of their market share in Europe. Despite the existing potential, there are also several obstacles for Africa to become a rising star in the European market. These obstacles can be explained as follows:
First and foremost, regional countries have serious requirements for the new initiative to discontinued energy projects due to a lack of financing and infrastructure. Within this framework, in order to diversify its energy supply, the EU will need to increase its investments in Africa. Therefore, the cost is likely to be higher than expected.
A second problem is the security situation arising from terrorist activities and instability in countries with high energy production, particularly Libya, Algeria, and Nigeria. Thus, to ensure the continuity of the EU’s gas flow, it may be necessary to pressure to create stability in these countries. In turn, this may further weaken the current environment of insecurity.
Last but not least, both Africa and Europe may be unable to reach their green energy transition targets. In order to facilitate economic development, the leaders of both continents advocate the use of natural gas as a “transition fuel” and support investment in renewable energy sources, such as solar, wind, and hydroelectricity. Although the common effort to halt dependence on Russian energy could slow the transition to green energy for both continents.
In spite of all these potential problems, African countries still have the most potential to reduce their energy dependence on Russia. Surely, it is not easy to reduce the dependence on Russian natural gas. However, if the necessary conditions for increasing Africa’s gas production are provided and the security of energy supply is guaranteed, the continent has the potential to reduce Europe’s dependence on Russia.
Furthermore, as investments in the continent grow and diversify, projects for the EU’s electricity needs can accelerate, not just in natural gas, but also in solar and wind energy. Africa will benefit from the EU’s decision to evaluate its potential by gaining access to other forms of energy and fostering its economic, political, and social prosperity. This will result in a renaissance of Africa as a result of its increasing importance on the European market.
[1] “How Europe Can Cut Natural Gas Imports From Russia Significantly Within a Year”, International Energy Agency, https://www.iea.org/news/how-europe-can-cut-natural-gas-imports-from-russia-significantly-within-a-year, (Date of Accession: 20.08.2022)
[2] “Financing Putin’s war: Fossil fuel imports from Russia during the invasion of Ukraine”, CREA, https://energyandcleanair.org/financing-putins-war/, (Date of Accession: 20.08.2022)
[3] “Top 10 African Countries Sitting on the Most Natural Gas”, Energy Capital Power, https://energycapitalpower.com/top-ten-african-countries-sitting-on-the-most-natural-gas/, (Date of Accession: 20.08.2022)
[4] “Germany is Keen to Pursue Gas Projects with Senegal, Says Scholz on First African Tour” Reuters, https://www.reuters.com/world/russia-looms-large-scholzs-first-africa-tour-chancellor-2022-05-22/ (Date of Accession: 20.08.2022)
[5] “Algeria Becomes Italy’s Biggest Gas Supplier in New €4bn Deal to Reduce Russian Dependency”, Euronews, https://www.euronews.com/2022/07/18/italys-draghi-visits-algeria-for-gas-talks-while-political-crisis-continues-at-home (Date of Accession: 20.08.2022)
[6] “EU Makes Offers to Nigeria to Drive LNG Supply to Replace Russian Gas”, Premium Times, https://www.premiumtimesng.com/news/top-news/546596-interview-eu-makes-offers-to-nigeria-to-drive-lng-supply-to-replace-russian-gas.html, (Date of Accession: 20.08.2022)
