It noted that the Olokola LNG project was stalled as all international oil companies (BG, Shell, Chevron) withdrew from the project. ConocoPhillips withdrew from Brass LNG in 2013. “Even after placing Train 7 volumes in 2014, Nigeria LNG has not yet finalised the date for final investment decision” it said.

“Led by the shale gas boom in the US and substantial discoveries in Australia and East Africa, we are now entering a period when the market may see many projects compete among each other to secure buyers and reach FID” it added.

“The oil price decline is likely to stall the LNG market, with spot LNG prices reducing in line with crude oil prices, and buyers not wanting to sign contracts quickly. The large size of East African discoveries enables them to be profitable at much lower prices than West African projects. However, the distance of proposed African LNG terminals from key markets has eroded their competitiveness, especially for the premium Japan-Korea-Taiwan market.”

Highlighting a few central themes that will play out in the development of major LNG projects in Africa, the report said corruption and inefficiencies remained high. It also pointed to the fact that; “Local content obligations are rising. Mergers and acquisitions are becoming harder. Increasingly, transfer taxes and capital gains taxes are being applied”.

“Geopolitical risk remains high. West Africa, with its tribal conflict and political corruption, has long been perceived negatively” it said further. It also added that the growing number of attacks by Boko Haram in Nigeria, Cameroon, Chad and Niger, would further destabilize West Africa.

It went on to say fiscal terms would get stricter while financing risk remained high in the region, meaning that the huge scale of long-term investments would require external financing from multilateral partners such as the World Bank and the private sector, which may be complex.