Africa’s Gas Monetization Opportunity: Balancing Exports and Domestic Demand

Africa’s natural gas potential is undeniably significant, with the continent ranking second globally in terms of discovered but undeveloped gas resources. According to the African Energy Chamber’s (AEC) State of African Energy 2026 Outlook, more than 550 trillion cubic feet (tcf) of recoverable gas remain undeveloped, highlighting a strategic opportunity for investors. Major basins such as Mozambique’s Rovuma Basin (129 tcf) and Nigeria’s Niger Delta (113 tcf) underscore the scale of opportunity. However, opportunities in the sector lie not only in finding supply, but creating viable routes to monetization, industrialization and domestic demand.

LNG Exports Anchor Monetization

With significant export capacity already online, LNG remains the most established monetization route for African gas. In 2024, Africa supplied 34.7 million tons of LNG – with sub-Saharan Africa alone contributing 26.9 million tons. Nigeria, Angola, Equatorial Guinea and Cameroon were already exporters, while Mozambique’s Coral Sul FLNG and Senegal-Mauritania’s Greater Tortue Ahmeyim (GTA) project have added new capacity since 2022. Africa’s geographical proximity to both European and Asian markets give the continent a strategic advantage as west and southwest African LNG producers can serve as swing suppliers based on price spreads between Europe and Asia.

Meanwhile, several African export projects include domestic market obligations (DMOs), providing a portion of supply for local power and industrial use. Senegal, for example, plans to draw much of its gas-to-power feed from DMOs tied to GTA and the proposed Yakaar-Teranga LNG project. While DMOs can stimulate early domestic demand, they introduce counterparty and pricing risks. Furthermore, domestic gas prices are often far below international netback levels, creating a challenge for developers.

Global LNG supply is forecast to increase sharply through 2030, driven by the U.S. and Qatar. According to the AEC’s report, this has the potential to push Asian and European benchmark prices down from the $10-$13 per million British thermal unit (MMBtu) range seen in 2024-2025, potentially falling below $6 per MMBtu by the late 2020s. In this context, Africa must compete with increasingly competitive exporters while continuing to develop new projects and supply sources.

Domestic Gas: Power and Industrialization

Gas is expected to grow its share of primary energy demand globally, and African gas demand is forecast to grow by 60% by 2050. North Africa accounts for around two-thirds of Africa’s gas output, and gas dominates the power mix in Algeria and Egypt. Sub-Saharan Africa has a smaller gas-to-power footprint, but it is expanding, with Nigeria boasting 12.6 GW of installed gas-fired capacity. Ghana and Mozambique follow with 2.9 GW and 1.1 GW, respectively, while smaller plants operate in Senegal, Angola, Ivory Coast, Tanzania and South Africa.

Industrial use of gas remains limited but is growing, with South Africa currently serving as the region’s most advanced market for gas derivatives, including ammonia and gas-to-liquids. With the goal of reducing reliance on imports, Angola’s National Gas Plan prioritizes gas for industrial sectors such as petrochemicals, fertilizers and metals. According to the AEC report, gas also has potential in mining and metals processing in countries such as Angola and the Democratic Republic of Congo.

Infrastructure and Pricing Constraints

Lacking regional gas transportation networks capable of linking supply basins with demand centers, processing facilities and export terminals, infrastructure remains one of the most significant barriers to gas monetization in Africa. This lack of connectivity constrains both domestic market growth and the ability to move gas efficiently to export hubs.

Pricing is another major challenge throughout the continent, with domestic prices typically regulated and often well below export netbacks. Nigeria’s domestic benchmark price was set at $2.13 per MMBtu in April 2025, while international LNG prices were around $11-$13 per MMBtu in mid-2025. Therefore, the AEC’s report concludes that low domestic prices can stimulate demand but may discourage investment in supply projects, especially non-associated gas developments.

“Africa’s gas sector faces a complex set of constraints, but the opportunities are substantial,” states NJ Ayuk, Executive Chairman, AEC. “Government’s must balance affordability and energy access with the need to provide returns that support investment in pipelines, processing facilities and power plants. With the right balance of infrastructure investment, policy reform and strategic partnerships, gas can become a cornerstone of Africa’s energy transition and industrialization drive.”

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