DAKAR, Sept 19 – Senegal plans to increase the use of domestically produced natural gas in electricity generation as the West African country seeks to reduce its reliance on imported fuels and contain rising energy costs.
Energy Minister El Hadji Abdourahmane Diouf told Reuters that developing domestic gas resources, expanding renewable energy capacity and improving operational efficiency are central to the government’s strategy for reducing the underlying cost of electricity.
Senegal’s expanding oil and gas industry has contributed to economic growth and higher exports in recent years. However, a sharp increase in global energy prices linked to conflict in the Middle East has raised the cost of imported fuels and increased the government’s fuel subsidy burden.
The government, which came to power in June, has said it ultimately wants to reduce energy costs by about 30%, with subsidy reform forming part of the strategy.
“In the short term, the government is shifting from broad-based support to targeted subsidies focused primarily on the most vulnerable households, public transportation and strategic productive sectors,” Diouf told Reuters.
“The goal is to improve the efficiency of public spending without reducing consumer protection,” he added, noting that no specific subsidy reforms had yet been decided.
Senegal Seeks Greater Value From Domestic Gas
The strategy would make greater use of Senegal’s emerging domestic gas industry for the country’s power sector while retaining an export role for some resources.
Senegal began oil production in 2024 when Australia’s Woodside Energy started output at the Sangomar field. Gas production followed at the Greater Tortue Ahmeyim (GTA) liquefied natural gas project operated by BP, which spans Senegal and Mauritania.
The government is also developing the Yakaar-Teranga gas field, which has become a key component of its domestic gas strategy. Senegal’s state-owned oil company Petrosen received the licence for the field in April after it had previously been operated by US-based Kosmos.
Diouf said Yakaar-Teranga is a strategic project whose gas will supply the domestic market while also supporting exports.
“Senegal remains open to new partners who can support the project’s development, in accordance with national interests and under the best technical, economic and commercial conditions,” he said.
Senegal has also signalled broader openness to international investment in its petroleum sector. Earlier this month, the government announced plans to offer 109 of the country’s 113 oil and gas blocks to local and international investors.
Gas, Renewables and Subsidy Reform
The government’s approach is not limited to switching the fuel used by power plants. Senegal also plans to expand renewable energy capacity and improve the efficiency of its electricity system.
The strategy comes as the government seeks to reduce the fiscal burden associated with subsidising energy while maintaining protection for households and sectors considered economically important.
A greater domestic gas supply could also reduce exposure to international fuel prices by allowing more electricity generation to be linked to resources produced within Senegal. The extent of the savings will depend on domestic gas availability, infrastructure and the economics of supplying gas to power plants.
The government has indicated that the gas strategy will be supported by infrastructure connecting offshore resources with power plants and industrial users. A northern section of the planned gas network is being developed to transport gas toward domestic consumers.
Senegal’s approach reflects the country’s broader transition from an economy heavily reliant on imported energy toward one increasingly supported by domestic oil and gas production. The challenge for policymakers will be converting that resource expansion into lower electricity costs while maintaining investment in renewable energy and ensuring that the fiscal benefits of the sector are retained within the economy.
