Natural gas, rather than crude oil, could ultimately determine whether Namibia’s offshore petroleum discoveries translate into lasting economic growth, industrialisation and energy security, according to a new industry analysis.
As international oil companies move closer to developing multi-billion-barrel discoveries in the Orange Basin, attention is increasingly turning to the large volumes of natural gas found alongside the oil and how they can be commercialised.
A sector analysis published in Oil and Gas Alert by law firm Cliffe Dekker Hofmeyr (CDH) Namibia argues that gas commercialisation could become the defining factor in Namibia’s ability to maximise the benefits of its emerging petroleum industry.
“The answer will determine more than the design of upstream projects. Gas commercialisation may influence whether Namibia captures long-term domestic benefits from its petroleum sector, including reliable power generation, industrial development, port and logistics activity, local content, skills transfer and new infrastructure investment,” the report said.
Unlike oil, which can be produced and exported relatively easily, natural gas requires extensive infrastructure, including processing facilities, pipelines, power plants and export terminals, before it can generate economic returns.
However, that same infrastructure creates opportunities for broader economic development.
According to the report, gas-to-power projects could provide Namibia with a reliable domestic source of electricity while reducing dependence on imported energy. Access to local gas could also support the growth of energy-intensive industries, including manufacturing, fertiliser production, ammonia plants, marine bunkering and logistics operations.
The analysis notes that these opportunities align with Namibia’s local content ambitions. Under the final draft of the National Upstream Petroleum Local Content Policy released in March 2025, midstream gas projects would be required to prioritise Namibian goods and services, local employment and skills development.
The report comes as global demand for liquefied natural gas (LNG) continues to rise. LNG demand is projected to increase by 60% by 2040, while new technologies such as Floating Liquefied Natural Gas (FLNG) facilities and Floating Storage and Regasification Units (FSRUs) are lowering barriers to entry for emerging gas-producing countries.
At the same time, Namibia is positioned next to what could become one of the region’s largest future gas markets.
South Africa is expected to face a major gas supply shortage, commonly referred to as the “gas cliff”, by 2028 as supplies from Mozambique decline. The looming shortfall threatens industrial users and has intensified efforts to secure alternative sources of natural gas.
The Southern African Development Community’s Regional Gas Master Plan has already identified infrastructure corridors linking Namibia and South Africa as strategic priorities, including a potential Walvis Bay-to-Cape Town route.
According to CDH Namibia, this creates a ready-made regional market for gas from the Orange Basin and could significantly improve the commercial viability of future developments.
However, the report cautions that significant challenges remain. Gas projects must still secure long-term offtake agreements, remain cost-competitive, manage carbon emissions and satisfy investors that they can withstand commodity price volatility and project execution risks.
Project developers also face risks linked to geopolitics, inflation, trade policy uncertainty and labour shortages, all of which have contributed to delays and cost overruns in energy projects globally.
Despite these hurdles, the report argues that Namibia’s greatest petroleum opportunity may lie beyond oil exports.
While crude oil discoveries have generated international excitement, natural gas could prove to be the resource that powers industries, creates jobs, strengthens energy security and delivers long-term economic value long after first oil is produced.
