Gas Monetisation Strategy: Flaring Reduction and Domestic Use

From Waste to Value

For decades, Angola flared vast quantities of associated natural gas — the gas produced alongside crude oil from deepwater reservoirs. Flaring was the default because the infrastructure to capture, process, and transport gas did not exist at the scale of production, and the economics of gas gathering in deepwater environments were challenging. This represented both an environmental cost (greenhouse gas emissions, wasted energy) and an economic loss (foregone revenue from a marketable commodity).

Angola’s gas monetisation strategy aims to transform this waste into value through three channels: LNG exports via the Soyo terminal, domestic gas use for power generation and industry, and potential petrochemical feedstock supply.

Gas Production and Flaring

Angola’s gas production is predominantly associated gas — produced as a byproduct of crude oil extraction. This creates a structural link between gas availability and oil production trends. As oil output declines, associated gas volumes also fall, unless offset by dedicated non-associated gas development.

The Sanha Lean Gas Connection, which achieved first gas in 2024, represents a shift toward dedicated gas supply. Producing approximately 80 million standard cubic feet per day initially and designed to supply gas for 15 years, the Sanha connection provides non-associated gas to the Soyo plant, partially decoupling LNG production from crude oil decline curves.

The LNG Channel

The Angola LNG plant at Soyo is the primary monetisation outlet. With nameplate capacity of 5.2 million tonnes per year and expansion under consideration to approximately 8 mtpa, the facility provides a high-value export route for processed gas. In 2023, Angola exported approximately 175 billion cubic feet of LNG, generating significant revenue at prevailing global LNG prices.

The November 2025 production record — 5.23 million barrels of oil equivalent for the month, a 20% increase — demonstrates the impact of new gas supply connections. For the latest figures, see the brief on LNG Export Growth 2025.

Northern Gas Complex

Eni’s Northern Gas Complex adds a second major gas gathering system. The project comprises two offshore platforms, an onshore gas-processing plant, and pipelines connecting to the Soyo LNG terminal. At peak production, the complex is designed to deliver approximately 141 billion cubic feet per year of processed gas — a volume roughly equivalent to 80% of total 2023 LNG exports.

The Northern Gas Complex is significant for the monetisation strategy because it:

1. Aggregates gas from multiple offshore sources into a single processing system
2. Provides additional feedstock for LNG expansion
3. Reduces flaring from fields that previously lacked gas offtake infrastructure
4. Creates scale that justifies investment in onshore processing facilities

Domestic Gas Use

While LNG exports generate the highest per-unit value, Angola’s domestic energy needs create a competing demand for gas. The government’s vision includes:

Gas-to-Power

Angola’s electricity system remains heavily dependent on hydroelectric generation, which is vulnerable to drought, and diesel-fired generation, which is expensive. Gas-fired power plants — combined-cycle gas turbines (CCGTs) — offer a reliable, lower-emission alternative. Diverting gas to power generation reduces fuel import dependency by displacing diesel-fired generation.

Industrial Use

Manufacturing, cement production, and other industrial activities currently use imported liquid fuels that could be replaced by natural gas where pipeline infrastructure exists. The economic case depends on gas pricing, pipeline investment, and industrial demand aggregation.

Petrochemicals

A potential long-term application is petrochemical production — using natural gas as feedstock for methanol, ammonia, urea, and polyethylene. Angola does not currently have petrochemical capacity, but the combination of gas availability and growing regional demand for fertilisers and plastics creates an industrial development opportunity.

Cooking Fuel (LPG)

Liquefied petroleum gas, a byproduct of gas processing, can replace charcoal for domestic cooking. This addresses deforestation, indoor air pollution, and health outcomes — aligning with social development goals in the PDN 2023-2027.

Flaring Reduction Policy

Angola has committed to reducing routine gas flaring, aligning with the World Bank’s “Zero Routine Flaring by 2030” initiative. The policy framework includes:

• Requirements for new developments to include gas utilisation plans
• Penalties for routine flaring above permitted levels
• Investment in gathering infrastructure to connect flare sites to processing facilities
• Monitoring and reporting through ANPG regulatory oversight

Progress has been uneven. While the Soyo LNG plant and the Sanha connection have captured significant volumes, some offshore fields still flare gas due to the absence of gathering infrastructure or because retrofit costs exceed the economic value of the gas at current prices.

Economic Case for Monetisation

The economic argument for gas monetisation is straightforward: gas that is flared generates zero revenue while gas that is processed and sold generates income. At prevailing LNG prices of USD 10-15 per million BTU in European markets, the revenue from 175 Bcf of annual exports is substantial — likely USD 2-4 billion depending on contract structures and spot pricing.

The incremental economics of monetisation depend on:

Relationship to Oil Production Decline

Gas monetisation has a complex relationship with the oil production decline. On one hand, declining oil production reduces associated gas volumes. On the other hand, the development of non-associated gas resources — like the Sanha connection and Northern Gas Complex — can create a gas production stream independent of crude oil trends. This makes gas a potential growth sector within a declining overall petroleum industry.

The upstream investment outlook must therefore be assessed separately for oil and gas, with gas investments potentially offering more attractive returns in the medium term as LNG demand grows globally while oil faces energy transition headwinds.

Challenges

Several obstacles constrain gas monetisation:

1. Infrastructure cost: Subsea gathering systems, pipelines, and processing plants require billions in capital
2. Associated gas decline: As oil fields mature, gas production falls unless offset by dedicated gas developments
3. Domestic pricing: Gas sold domestically at regulated prices may not generate sufficient returns to justify investment
4. Competing demand: Balancing LNG export revenue (higher price) against domestic supply obligations (lower price)
5. Technical complexity: Deepwater gas gathering at the pressures and temperatures found in Angola’s reservoirs requires specialised engineering
6. Local content requirements: Gas projects must meet Angolanisation targets, which can constrain available workforce and supply chain options

Outlook

Angola’s gas monetisation strategy is at an inflection point. The Sanha connection, New Gas Consortium, and Northern Gas Complex collectively represent the largest expansion of gas infrastructure since the Soyo plant was built. If these projects deliver as planned, Angola will move from a position of chronic gas underutilisation to one where expansion of LNG capacity becomes necessary and economically justified.

The strategic imperative is clear: as oil production declines, gas represents Angola’s best opportunity for sustained hydrocarbon revenue — particularly in a global market where LNG demand is growing faster than oil demand.

Data Sources

LNG export data from US EIA. Sanha Lean Gas Connection from PGJ Online. Northern Gas Complex from EIA Angola analysis. Production data from Energy Capital & Power.

Monetization Pathways: Export and Domestic

Angola’s gas monetization strategy operates through two primary channels: LNG export through the Soyo complex and domestic gas-to-power through the natural gas generation program. The Soyo facility, with 5.2 mtpa liquefaction capacity, exported 175 Bcf in 2023 with 75% directed to European markets (primarily France and the United Kingdom) and 25% to Asia-Pacific (with India receiving approximately 35 Bcf).

New Supply Sources and Expansion

The monetization strategy is being reinforced by new upstream gas connections. The Sanha Lean Gas Connection achieved first gas in 2024 at approximately 80 million scf/day, expected to sustain 15 years of supply. A new gas consortium, over 50% complete in 2024, targets first production in 2025. Eni’s Northern Gas Complex adds two offshore platforms, an onshore processing plant, and pipelines to Soyo with peak production of approximately 141 Bcf per year.

These new supply sources support the November 2024 consideration of adding one additional liquefaction train or a 3 mtpa mini-train at Soyo. By November 2025, Angola LNG recorded a 20% production increase with total output of 5.23 million barrels of oil equivalent and daily LNG production of 147,358 boe/day. This production growth validates the government’s gas monetization strategy and supports further expansion investment.

Integration with Power Sector and Industrialization

The Angola Energia 2025 framework identifies gas as critical for creating a secure, competitive power system when integrated with hydropower. Gas-fired generation targets 19% of the planned 9.9 GW installed capacity. The strategy specifically recommends gas-to-power installations in Luanda, Benguela, and Namibe to enable gas logistics infrastructure supporting broader industrialization, linking to the PDN 2023-2027’s target of increasing industry’s share of electricity consumption from 8% to 25% and growing non-oil GDP to approximately 79% of total GDP.

Broader Economic and Institutional Context

Angola’s petroleum sector operates within the institutional framework established by the PDN 2023-2027, which targets total GDP of 62 trillion kwanzas, annual growth of approximately 3.3%, and non-oil GDP growth of approximately 5% annually. The plan’s three fundamental pillars of human capital development, infrastructure modernization, and economic diversification all depend on sustained petroleum revenue. Public debt reduction from over 100% of GDP in 2020 to just above 60% in 2024 demonstrates fiscal discipline, while agriculture’s share of GDP more than doubled from 6.2% in 2010 to 14.9% in 2023, showing that diversification is progressing alongside oil sector development. The Estrategia de Longo Prazo Angola 2050 envisions growing non-oil GDP from USD 84 billion to USD 275 billion and non-oil exports from USD 5 billion to USD 64 billion by 2050, with the petroleum sector providing the transitional revenue base for this transformation. The Kwenda social program, which distributed USD 420 million to 251,000 families under the previous PDN, illustrates how oil revenue translates into direct social investment that builds the human capital foundation for long-term economic diversification. The current plan’s alignment with the African Union Agenda 2063 and the UN Sustainable Development Goals 2030 further reinforces the connection between petroleum sector performance and broader development outcomes, with 75% of the PDN’s 284 action priorities directly impacting the 17 SDGs.

Downstream Integration and Refinery Development

Angola’s petroleum sector strategy increasingly links upstream production to downstream processing through three major refinery projects. The Cabinda Refinery, inaugurated on 1 September 2025, operates at 30,000 b/d Phase 1 capacity with Phase 2 expansion to 60,000 b/d expected within 18-24 months, representing a USD 550 million investment with Gemcorp holding 90% and Sonangol 10%. The Lobito Refinery, at approximately 12% completion, targets 200,000 b/d capacity with a total investment of USD 6.6 billion and a USD 4.8 billion financing gap being discussed with ICBC, Societe Generale, Standard Chartered, and Afreximbank. The Soyo refinery remains on hold with an earliest expected online date of 2028. Together, these projects address Angola’s approximately 72% import dependency for refined petroleum products, equivalent to roughly 3.3 million metric tons annually.

Gas Supply Expansion

The Sanha lean gas connection achieved first gas in 2024 at approximately 80 million scf/day, filling roughly 40% of Angola LNG’s capacity and securing a 15-year supply horizon for the Soyo LNG facility.