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First gas from bp and Kosmos Energy’s Grande Tortue Ahmeyim (GTA) offshore project is expected to come online by the end of 2024. This increased supply of natural gas is likely to have a dual impact, making energy more affordable while also enhancing agricultural productivity by boosting the accessibility and production of fertilizers.
Agriculture is an important barometer of the Senegalese economy, accounting for about 16% of GDP and providing 30% of total employment. In May 2024, Senegal’s President, Bassirou Diomaye Faye, emphasized that his government’s top priority is to further develop agriculture to achieve food sovereignty. President Faye wants to boost investment in the sector, as currently, Senegal relies on imports to meet approximately 70% of its food needs. Additionally, the president expressed his commitment to lowering fertilizer prices to make it more accessible for farmers.
Senegal’s gas-to-power strategy can significantly bolster the country’s agricultural ambitions. Several gas-fired power plant projects will add more power to the national grid using domestic gas. The 255 MW Saint Louis power plant, expandable to 500 MW, and the 366 MW Cap des Biches power plant, expected to start operating in 2025, will be supplied by gas from the GTA field. The 360 MW Sandiara power plant, set to use associated gas from Woodside’s Sangomar oil project or natural gas from Kosmos Energy’s Yakaar Teranga project, is expected to be operational by 2026. These initiatives align with the Emerging Senegal Plan (PES), which aims to reduce electricity costs by 2035.
Lower energy costs can spur large-scale agricultural projects like Agropoles, five agro-industrial processing zones included in the PES, distributed across Senegal according to regional crop specializations. The Agropole Sud project, with 55% of the work completed, is expected to be the first to open in October 2024, specializing in mango and cashew production. Agropole Centre, set to launch in 2025, will feature peanut and cereal farms and processing plants. Agropole Ouest will focus entirely on livestock, poultry and dairy production.
Additionally, the development of the agricultural sector will be accelerated by the production of fertilizers. Natural gas is the primary feedstock for the synthesis of ammonia, a key component of nitrogen-based fertilizers, which Senegal currently imports entirely. In May 2024, the national oil company Petrosen completed the feasibility study for its Senegal Fertilizer Company (SEFCO) project. This project aims to use domestic gas to achieve self-sufficiency in urea production and better utilize its phosphate resources by formulating mixed NPK fertilizers—chemical fertilizers containing nitrogen, phosphorus and potassium.
SEFCO plans to produce approximately 100,000 tons of urea per year and could be operational by 2029. Ultimately, Petrosen aims to supply markets in the West African sub-region, as well as Europe, the United States and Brazil—two of the world’s largest importers of urea. SEFCO’s plant will also capture nearly 17 million tons of carbon dioxide over its thirty years of operation, utilizing technologies that can be reapplied in the agri-food industry. This initiative will foster a virtuous cycle of innovation, energy efficiency and agricultural development in the country.
Senegal’s strategy of leveraging natural gas to develop agriculture presents promising investment opportunities for both domestic and international investors. The government has implemented supportive policies and incentives, including tax breaks and access to financing. Additionally, Senegal’s proximity to European markets offers a significant advantage for export opportunities. The MSGBC Oil, Gas & Power 2024 conference in Dakar, from December 3-4, will highlight key energy projects and connect investors with local stakeholders.
Explore opportunities, foster partnerships and stay at the forefront of the MSGBC region’s oil, gas and power sector. Visit www.msgbcoilgasandpower.com to secure your participation at the MSGBC Oil, Gas & Power 2024 conference. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.