Japanese firm to help Ghana boost gas infrastructure development

Under the terms of the memorandum of understanding (MOU) with the state-owned GNPC, Mitsui will act as “facilitator and adviser” in pre-tender feasibility studies aimed at developing infrastructure for processing gas from Ghana’s offshore Tano basin.

Mitsui will also assess how best to construct a second processing plant for raw natural gas from the Tano basin, the ministry said.

Ghana’s deputy minister of petroleum Benjamin Dagadu said the MOU followed an earlier technical and financial presentation that Mitsui had given to the petroleum and finance ministries.

Dagadu, a former GNPC manager with experience of working on projects including the development of the Tano basin, said it was hoped that the cooperation between GNPC and Mitsui could lead to “an even bigger partnership”.

According to the petroleum ministry, GNPC has already conducted initial studies into the production of gas from fields in addition to Tano and the exploration of new fields.

The commissioning earlier this year of Ghana’s first gas processing plant, the $800 million Atuabo facility, has been described by the government as “a game changer” for the country’s economy.

Ghana’s government said the plant will produce four different products from the raw or wet gas it will receive. Atuabo alone is expected to 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”, the government said. This is because the Volta River Authority, the main generator and supplier of electricity in Ghana, would be able to purchase the gas in Ghanaian cedi.

Ghana’s president John 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.”

Last year saw the launch of a new fund to increase local participation in Ghana’s developing oil and gas industry and to help boost the financial capacity of domestic companies operating in the sector.

The Weston Oil and Gas Fund, a public-incorporated Ghanaian firm, is the first mutual fund of Weston Capital. The fund also aims to encourage bulk distribution companies, oil marketing companies and other businesses to issue corporate bonds.

In July 2014, the World Bank approved additional financing to support the overall development of Ghana’s oil and gas reserves, taking total support at that time 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.”

Last month, the World Bank approved what it said was a record investment of $700 million in guarantees in specific support for Ghana’s offshore Sankofa gas project. The guarantees are expected to attract $7.9 billion in new private investment for offshore natural gas in the country, “representing the biggest foreign direct investment in Ghana’s history”, the bank said.