Out-Law News 2 min. read

New gas plant will be economic ‘game changer’ for Ghana, says president


Ghana’s government said preparations are under way for the commissioning of an $800 million gas processing plant that will be “a game changer” for the country’s economy.

The Atuabo gas plant is virtually complete and a safety audit is about to start. Pre-commissioning tests will then pave the way for the plant to be linked to the floating production storage and offloading vessel, the Kwame Nkrumah, which operates offshore in Ghana’s Jubilee oil fields.

Ghana’s president John Mahama said: “The multiplier effect of this project would be enormous for our economy. It would even help our macroeconomic stability in terms of reducing the pressure on our foreign exchange reserves.”

The plant will save the country “almost half a billion dollars a year in light crude purchases, and another billion dollars in foreign exchange savings for the purchase of light crude oil”, Mahama said. He said this was because the Volta River Authority (VRA), the main generator and supplier of electricity in Ghana, would be able to purchase the gas in Ghanaian cedi.

Mahama said there are “very bright prospects” in the medium term for Ghana’s energy infrastructure overall, with the anticipated coming on stream of the Ten and ENI oil field projects that will see Ghana’s oil production move up to “about 200,000 barrels a day”, Mahama said.

Ghana is “on course” for an increase in electricity generation capacity of 5,000 megawatts and to become a self-sufficient energy producer and net exporter to other countries, Mahama said.

Mahama said: “The important thing about this gas is that it allows us to have energy security in terms of putting in more thermal production and it fits into our programme of turning Ghana into the energy hub of West Africa. All the companies that we have signed memorandums of understanding with for installation of independent power producer thermal plants will feel secure to go ahead, because they know that by the time they finish their thermal projects, gas will be available to power those projects.”

According to Ghana’s government, the plant will produce four different products from the raw or wet gas it will receive. This includes 107 million standard cubic feet of lean gas per day, 500 tonnes of liquefied petroleum gas daily, together with 80 tonnes of pentane and 45 tonnes of condensates.

Figures released by oil and gas exploration and production company Kosmos Energy last August showed that gross production from Ghana’s Jubilee field, which started up in 2010, averaged approximately 104,000 barrels of oil per day (bopd) in the second quarter of 2014, an increase from 102,000 bopd in the first quarter of the year.

Total electricity generated in Ghana in 2013 was 12,874 gigawatt hours (GWh), around 6% more than in 2012, according to latest figures from the VRA (66-page / 1.43 MB PDF). The VRA said: “For 2014, the total electricity requirement of the country would be in the range of 15,725-16,500 GWh. The low-side represents relatively low supply due to the comparatively high cost of electricity as a result of lower than expected flow of gas for power generation and consequently the use of more expensive oil as fuel.”

Earlier this year, the World Bank approved additional financing to support the development of Ghana’s oil and gas reserves, taking total support to date to nearly $58 million. The bank’s country director for Ghana Yusupha Crookes said: “The discovery of deep oil and gas reserves has resulted in a rapid expansion of the oil and gas industry in Ghana, which has the potential to bring significant economic development opportunities to the country.”

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