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Monetising Ghana’s gas: Nana Addo can’t reinvent the wheel

  • SOURCE: | qwesa2big
  • nana addo

    As an Energy Watcher and Commentator, I have been following closely developments in the oil and gas industry in Ghana.

    I have noted discussions by stakeholders, especially our political leaders on how they wish to commercialize the oil and gas resources of this country. I have read with keen interest the recent declaration by the NPP flagbearer, Nana Akufo-Addo, that he will initiate policies that would monetize the country’s gas resource with a view of creating a multibillion dollar gas feedstock industry.

    I find his declaration interesting in view of the efforts that have been put in by the current government in that direction. I am wondering and curious to know what Nana Addo will do differently.

    Nana Akufo-Addo says the vision of his government will be to transform Ghana’s economy from an exporter of raw materials, and a retailer of cheap imported goods, to a modernized, industrialized one focused on value addition activities. One of the critical pillars he identifies to achieve his vision is the commercialization of the gas resource of the country, and he says that includes “monetizing the country’s gas to create a multibillion dollar gas feedstock industry.”

    Nana Akufo-Addo outlined a number of policy measures to help realize this vision at a fundraising dinner organized in London by the UK branch of the Young Executive Forum of the NPP on Friday, June 11, 2016.

    It is a fact that Ghana struck oil in commercial quantities in 2007 under the Kufuor regime. However, as soon as the new NDC regime took office in 2009, it recognized that the country should not discount the commercial potential of significant natural gas which was expected to be produced with oil from the Jubilee fields. Conservative estimates showed that Ghana has about 4Tcf (four trillion cubic feet) of gas reserves and that can translate into some 3,300MW of generation capacity. It was estimated that 1000 cubic feet of gas was expected to be produced with each barrel of oil.

    The NDC Government considered it expedient to monetize the ‘associated gas” by processing it to extract natural liquids (NGLs) and liquefied petroleum gas (LPG) and the remainder used for power generation and industrial application.

    Also, it was important to the government that the country’s gas monetization plans for the Jubilee field and the policy framework considerations needed to ensure sustainable development of otherwise stranded gas assets.

    Accordingly, in February 2011, the Government commissioned a “National Gas Development Task Force” to review and make appropriate recommendations for the speedy realization of a national gas commercialization infrastructure system. The Task Force reviewed all aspects of the gas commercialization project, including its technical, economic and financing options and recommended the most efficient and viable way to bringing it to fruition. Members of the Task Force included:

    Dr. Kwesi Botchway, former Minister of Finance and a member of the Economic Advisory council
    Mr. Amarquaye Armar, former Energy Policy Advisory to H.E the President (Member)
    Nana Boakye Asafu – Adjaye, former MD, Ghana National Petroleum Corporation (Member)
    Ms. Anna Bossman, former Deputy Commissioner, Planning/ Investigations, CHRAJ (Member)
    Hon. Emmanuel Buah, former Deputy Minister of Energy (Member)
    Dr. Kwaku Temeng, Oil & Gas Expert & former Member of GNPC Board of Directors (Member)
    Hon. Seth Terkper, former Deputy Minister of Finance and Economic Planning (Member)

    The Task Force did a thorough job by reviewing all available project financing models and selected the met the Government’s primary objective for the gas commercialization project.

    In selecting the best model, the upheld the Government’s commitment to ensuring local content and local participation was strictly adhered to. Subsequently in April 2011, the Task Force submitted its report to the President and eventually culminated in the establishment of the Ghana National Gas Company (Ghana Gas) as a limited liability company in July 2011.

    Ghana Gas was given the responsibility to build, own and operate infrastructure required for the gathering, processing, transporting and marketing of natural gas resources in the country. The Government secured a USD I billion to undertake “the Early Phase Ghana Gas Infrastructure Project (EPGGIP).” Under the supervision of the Ghana National Gas Company (Ghana Gas), the Contrator (SINOPEC) completed the design and construction of the following:

    • A 44-km shallow water section of the Offshore Pipeline from the FPSO Kwame Nkrumah to the Atuabo Gas Processing Plant site. An initial 14-km deep water section of the Offshore Pipeline was inherited by Ghana Gas from GNPC.

    • A state of the art 150 million standard cubic feet per day Gas Processing Plant at Atuabo.

    • A 111-km Onshore transmission pipeline to transport lean gas from the Early Phase Ghana Gas Processing Plant site to the Aboadze Thermal Plant.

    • A 75-km Onshore transmission lateral pipeline from Esiama to transport lean gas to power plants at Tarkwa/Prestea (70 percent complete).

    • The Atuabo Gas Processing Plant was successfully tied in to the Jubilee Field on November 8, 2014. Ghana Gas thus began commissioning of the Atuabo Gas Processing Plant.

    Fifteen (15) days later, on November 23, 2014, the Atuabo Gas Processing Plant began delivery of the nation’s first processed gas from Ghana’s hydro-carbon fields, with the supply of lean gas to the VRA at the Aboadze Thermal enclave. The commissioning process ended successfully on March 31, 2015, with a seamless transition from commissioning to commercial operation on April 1, 2015.

    • The Atuabo Gas Processing Plant successfully completed its first mandatory vendor/insurance-required maintenance shutdown at 4,000 hours of operation in April this year (2016).

    • The Early Phase Ghana Gas Infrastructure Project (EPGGIP) has gone through successful mechanical completion, pre-commissioning and commissioning during the past year. Works such as free-span correction, as-built surveys, hydro-testing of the facility, MEG Handling and dewatering works, among many others, were carried out during this period.

    • The Atuabo Gas Processing Plant is today supporting the generation of over 500 Megawatts of power at a much cheaper price per kilowatt, by providing cost effective, more efficient lean gas to the Aboadze Thermal Plant. The plant is supplying over 100 million standard cubic feet of gas a day (mmscfd) to Aboadze, contributing effectively to the reduction of the current energy deficit.

    • Additionally, the Atuabo Gas Processing Plant is on track to produce Liquefied Petroleum Gas (LPG) of more than 180,000 metric tonnes per year, which would amount to over 50% of the present estimated 360,000 metric tonnes annual LPG national demand.

    • Moreover, Atuabo also produces over 46,000 metric tonnes of condensate annually. All these have come to support the economy and foreign exchange retention in the country.

    I wish to ask whether Nana Akufo-Addo will reinvent the wheel in the commercialization of the country’s gas resource seeing that the government has gained tremendous mileage in that direction.

    By :The Gazette

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