DAKAR, May 13 – Senegal’s Yakaar-Teranga gas project is expected to require about $7.5 billion in investment, according to it’s state-owned oil company Petrosen, as the West African nation moves to strengthen domestic energy production and industrial capacity.
The offshore development could significantly reduce Senegal’s annual energy subsidy bill, which currently stands at around $1 billion, Mouhamadou Diop, chief executive officer of Petrosen’s trading arm, said during an event in Dakar.
The Yakaar-Teranga offshore gas discovery was made by Kosmos Energy Ltd. roughly a decade ago and, alongside the Grand Tortue Ahmeyim project, helped position Senegal as an emerging energy producer in West Africa.
Senegal plans to use domestic gas supplies to expand electricity generation and support industries including petrochemicals and fertilizer production.
BP Plc was previously involved in the project before exiting in 2023. Kosmos Energy’s contract is set to expire in July, potentially leaving Senegal as the sole shareholder in the development.
The move reflects a broader trend among African resource-producing nations seeking greater state participation and control over strategic natural assets.
Senegal began offshore oil production in 2024 through the Sangomar field, marking a major milestone in the country’s push to establish a domestic hydrocarbons industry.
“We produce oil, but we remain a net importer of refined petroleum products,” Diop said. “The goal is to use revenues from oil and gas to invest in exploration, become an operator and develop projects ourselves.”
According to Diop, the first phase of Yakaar-Teranga would require approximately $2.5 billion to produce around 300 million cubic feet of gas per day for the domestic market.
A second phase, estimated at roughly $5 billion, would support downstream industrial projects including fertilizer, petrochemical, steel and cement production.
Petrosen said financing could come from a combination of regional debt markets, development finance institutions and diaspora-linked capital.
“Properly structured offtake contracts, often 15 to 20 years, can support project debt of investment-grade quality,” Diop said.
