EU Plans to Court Africa to Help Replace Russian Gas Imports

(Bloomberg) -- The European Union will seek to step up cooperation with African countries to help replace imports of Russian natural gas and reduce dependence on Moscow by almost two-thirds this year.

Countries in Africa, in particular in the western part of the continent, such as Nigeria, Senegal, and Angola, offer largely untapped potential for liquified natural gas, according to a draft EU document seen by Bloomberg News. The communication on external energy engagement is set to be adopted by the European Commission later this month as part of a package to implement the bloc's plan to cut energy reliance on Moscow.

The 27-nation bloc wants to shift away from its biggest supplier after President Vladimir Putin invaded Ukraine. Its draft energy strategy also seeks to prepare the region for imports of 10 million tons of renewable hydrogen by 2030 to help replace gas from Russia, in line with the ambitious EU Green Deal to walk away from fossil fuels and reach climate neutrality by mid-century.

The EU plan to increase LNG imports by 50 billion cubic meters and boost shipments of pipeline gas from countries other than Russia by 10 billion cubic meters requires setting relationships with traditional suppliers on a new basis and extending trade to new emerging suppliers, according to the document.

Key steps include fully implementing the agreement with the U.S. for the delivery of 15 billion cubic meters of additional LNG in 2022 and around 50 billion cubic meters annually until 2030. Another target is to sign a trilateral memorandum of understanding with Egypt and Israel to boost LNG supplies to Europe by summer this year.

The bloc also plans to support the doubling of the capacity of the Southern Gas Corridor, which brings gas from Azerbaijan, to 20 billion cubic meters per year. And while a working group with Canada has been set to look at increasing gas deliveries in the coming years, Japan and South Korea already redirected a number of LNG cargoes to Europe.

“Qatar stands ready to facilitate swaps with Asian countries,” the commission said in the draft strategy. “In terms of pipeline gas, Norway has already increased its deliveries to Europe and both Algeria and Azerbaijan have indicated their willingness to do so.”

The EU's executive arm also said in the document that the bloc must work to ensure “open, flexible, liquid and well-functioning global LNG markets,” both with major producers, such as the U.S., Australia and Qatar, and consumers, including China, Japan and South Korea.

The increased purchases by Europe, coming amid growing global demand and already high LNG prices, will have an effect on global trade.

“The EU also needs to send consistent signals to the market to balance the short and medium term needs with longer term goals,” according to the document. “All this requires a much more coordinated gas policy to exploit the market and political weight of the union and developing a tool for a joint action.”