Senegal's Big LNG Gamble

Senegal's plan to boost its economy by expanding liquefied natural gas (LNG) production comes as European demand is forecast to fall and market competition is on track to intensify.

A new IISD report warns that ramping up investment in LNG will entrench fossil fuel dependency, risks stranded assets, and would leave the economy more vulnerable to international price shocks.

Meanwhile, bringing more LNG online will come at a high cost requiring significant infrastructure investment, yet much of the revenue may never reach government budgets if LNG profits are reinvested into further deployment. With global LNG demand set to decline, and revenues uncertain, the government must consider a scenario where revenues are negligible.

Senegal already faces a range of climate-related challenges, including heat stress, shifting malaria patterns, and rising sea levels, while existing LNG exploration work has already reduced coastal communities' access to fertile fishing waters.

Renewable energy investments do not face the same risks as LNG and are already having a positive impact on Senegal's economy with costs falling rapidly. Prioritizing clean energy deployment, managing environmental and socio-economic risks, and re-evaluating LNG deployment should be key priorities for the Senegal government.