Mauritania’s massive gas potential and foreign investment

Mauritania’s natural gas reserves are attracting the interest of international energy markets, especially with the country recently announcing a gas field capable of producing up to 10 million tonnes per year. In total, Mauritania has gas reserves of 100 trillion cubic feet, more than other African countries such as Libya and Egypt.

However, despite its gas wealth, Mauritania does not have sufficient funds to invest in the necessary infrastructure for gas extraction and the construction of liquefaction and storage plants. For this reason, the West African nation relies on investments from foreign companies to boost its gas industry, among them Kosmos Energy, TotalEnergies, BP and Shell.

Mauritania is trying to attract foreign investors to exploit the country’s great gas potential. Specifically, the government is seeking to develop gas pipelines and port infrastructure to enable the export of Liquefied Natural Gas (LNG), which will begin to be produced by the end of 2023. As stated by African sources, among the government’s objectives is the country’s port city and commercial centre, Nouadhibou, which they hope to turn into a gas processing, import and export hub. 

Furthermore, the development of Mauritania’s gas industry will have a significantly positive impact on the country’s economic growth. The country’s current situation is often compared to that of the Gulf states before the discovery of oil, its main source of income today. The 4.6 million people islamic, West African nation might just change its economical position to match that of Gulf nations if it plays its cards right and takes advantage of its gas reserves.

In addition to having natural resources, it is necessary to know how to manage them and enjoy security and stability at the political level. Libya, for example, is home to some of the largest oil reserves in Africa, but due to the situation in the country, it has not been able to develop its national economy.

As announced by multiple sources, “Mauritania is destined to become a major player in the global natural gas supply chain. The country is poised to see an influx of new investments that will help kick-start its gas revolution”.

Kickstarting key LNG projects

Kosmos Energy and BP are currently working to fast-track the first 2.5 million metric tons per year phase of the USD $4.8 billion Greater Tortue Ahmeyim (GTA) LNG project offshore Mauritania and Senegal. The project holds an estimated 15 trillion cubic feet of offshore gas reserves that straddle the maritime border of the two West African countries.  

During the 2Q earnings call in August 2022, Andy Inglis, CEO at Kosmos Energy, stated “we continue to make good progress quarterly and are still targeting first gas in 3Q2023 with the first [GTA] LNG cargo targeted for 2024.” He added that Phase 1 of the project was more than 80% complete at the end of June 2022.

Furthemore, BP, which is leading the GTA, has turned its focus on African projects to better supply European markets after pulling out of Russian projects following Russia’s invasion of Ukraine. In addition to GTA, BP also has the Yakaar-Terenga and BirAllah LNG projects in Mauritania and Senegal.

Embracing political stability and security

Mauritania enjoys political stability and security. The last elections in 2019, which gave victory to H.E. Mohamed Ould Ghazouani, were held without incident and under the control of international observers from the African Union, the United Nations and the embassies of the United States, Spain and France. Moreover, as stated by sources, “Mauritania’s fight against terrorism represents a unique experience in the G5 Sahel, as it is the only country in the region to have defeated armed groups and extremists”. This is a clear competitive advantage when compared to its neighbouring countries, which should help it catapult into the international gas market’s elite.

International cooperation

The Mauritanian government has an important cooperation with France to tackle terrorism in the region. Moreover, at the last NATO summit in Madrid in June 2022, Mauritania and the Atlantic Alliance forged closer ties with the same objective.

The government also has strong ties with its Maghreb neighbours, in particular Morocco and Algeria in trade matters. Through various agreements with Mauritania, both countries trade with West Africa and the Gulf of Guinea. In September 2022, Ould Ghazouani, met with his Moroccan counterpart, Abdellatif Hammouchi, at the headquarters of the General Directorates of National Security and Territorial Surveillance (DGSN-DGST) to discuss ways of enhancing security ties and countering common regional security threats. It was the second meeting between the security chiefs in two years.

According to a statement made by the DGSN, “the two parties also discussed the importance of strengthening cooperation in the field of police training”, emphasising that both countries anticipate further collaboration and exchange in the security field.

It is important to mention that Mauritania also signed military cooperation agreements with Russia in 2021 in an attempt to diversify its partners. Nevertheless, in economic terms and given the importance of the GTA LNG project between Mauritania and Senegal, Senegal’s President Macky Sall and German Chancellor Olaf Scholz recently met to discuss supplying gas to Europe. Sall said Senegal is willing to talk with European countries to supply LNG, as Senegal’s LNG output is forecast to reach 2.5 million metric tonnes per year in 2024, and 10 million metric tonnes per year by 2030.

Current challenges and mitigating them

Mauritania’s main challenges are poverty and illiteracy. The government will have to manage gas revenues in such a way as to reduce both problems. It will also have to invest in infrastructure, and diversify the national economy. Furthermore, less than 50% of the country’s population has access to electricity, a problem which can be easily eased by these gas projects.

Given the current Russia-Ukraine-NATO crisis, through its gas industry, Mauritania could also become a key energy partner for Europe as it seeks to wean itself off its dependence on Russian gas.

About the Author: Felipe Gaitán Michelsen