• African gas projects drive significant contracts for Asian shipbuilders, especially for Floating Liquefied Natural Gas (FLNG) units.

• South Korean and Chinese firms dominate FLNG construction, highlighting Africa's limited industrial capacity in this high-value segment.

• Africa loses out on economic value from the construction phase, with local content policies facing challenges due to technical gaps.

African gas projects are rapidly expanding, attracting substantial capital, particularly for their industrial development phases. However, this growth largely benefits Asian shipbuilders.

On July 7, South Korean firm Samsung Heavy Industries, a leader in maritime infrastructure, announced a preliminary agreement. It will build a Floating Liquefied Natural Gas (FLNG) unit off Mozambique for $637 million. This deal confirms Africa’s role as an energy supplier but also shows the continent still misses out on the most lucrative industrial segments.

Asian companies dominate the construction of FLNG units and offshore platforms. By mid-2024, South Korean shipyards, including Samsung Heavy Industries, won over two-thirds of new FLNG construction contracts.

The Coral Sul FLNG project off Mozambique, completed in 2022, exemplified this trend. Samsung Heavy Industries designed and built it in South Korea at a cost of around $7 billion. Local involvement primarily focused on auxiliary services. Eni reported training about 200 Mozambicans, creating 1,400 direct and indirect jobs, and awarding roughly $800 million in contracts to local firms.

Senegal and Mauritania's Greater Tortue Ahmeyim (GTA) project, operated by BP and Kosmos Energy, follows a similar pattern. This gas project uses a floating liquefied natural gas unit (FLNG Gimi), converted in Singapore. It also features an FPSO platform, assembled in China by COSCO shipyard, for offshore gas pre-treatment. The entire project is valued at over $1.3 billion.

These examples reveal a core reality. African shipyards currently lack the certification and technical capacity to build these complex energy infrastructures. Consequently, African countries consistently lose out on these high-value markets to Korean, Chinese, and Singaporean companies.

This means African nations forgo a major share of the economic value generated during the FLNG project development phase. This phase, encompassing design, construction, and industrial equipment, represents a significant portion of overall investments. According to consultancy Norton Rose Fulbright, liquefaction alone consumes up to 75% of the capital invested in an LNG project, including floating units.

Several African countries have strengthened their local content requirements in response. However, a Wood Mackenzie study indicates these efforts face hurdles due to a lack of technical capacity and misalignment with international standards.

This situation highlights the current limitations of Africa’s local content policies. It also underscores the massive industrial capacity development needed for producing countries to capture more value from their gas projects, especially through skilled workforce training and state support for industrialization.

This article was initially published in English by Abdel-Latif Boureima

Edited in English by Ange Jason Quenum