Senegal as an LNG Exporter Stranded asset risks in the transition

Following the Russian invasion in Ukraine and the stop of Russian gas supply, Germany’s Chancellor Olaf Scholz has shown interest in supporting Senegal’s development of fossil gas resources in the hope to draw on the country’s LNG supply (Hoffmann and Abd Ali, 2022). [...] Considering the increasingly questionable business case for oil and gas development and the high costs both in terms of export investment and local impacts, Senegal may wish to reconsider the role of fossil fuel revenues in its development aspirations. [...] Especially considering the cost overruns and recent exit of BP from the Yakaar- Teranga project, Senegal is seeking significant investment to advance the development of its oil and gas exploration, as well as midstream and downstream industries (Ministry of Petroleum and Energies, 2022). [...] Figure 6 Interplay of Cost of Consumers’ production, production level of competition, and and transport demand demand factors consumer including alternatives Competitors’ cost of production and transport to consumers 13 Stranded asset risks in the transition The cost competitiveness of an LNG project is a function of the overall cost of production and transport from a given site (the location of h. [...] Table 2 Scenario 2020 2021 2022 2023 LNG share of total European gas Share of Gas Demand met through LNG (%) 14% 14% 28% 27% consumption We break down the WEO pathways to the Asian Pacific level by applying the share of global fossil gas demand from Asia Pacific (taken from the WEO) to the global LNG demand scenarios derived as above.