Output woes will delay, not halt, Angola's gas sector

Subject

Outlook for Angola's LNG sector.

Significance

Angola has ambitions to be a significant African liquefied natural gas (LNG) exporter, after Nigeria and Equatorial Guinea. The construction of a multi-billion dollar plant at Soyo on the country's northern border lies at the heart of government plans, and is also seen as a way to reduce gas wastage through 'flaring' and unclogging pipeline networks. However, Soyo has been beset with technical problems.

Impacts

• Plans to use the sovereign wealth fund as a way to drive diversification may be stymied by fiscal shortages and governance problems.
• The drop in oil-driven business could prompt Angola's consolidating banking sector to lobby for reforms to facilitate consumer banking.
• Angolan elites will reduce their oil exposure by diversifying their interests, including into Portuguese and Brazilian telecommunications.