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No gas for fertiliser plant

  • SOURCE: | qwesa2big
  • A new report by Ecobank Research indicates that Ghana may not have enough gas to fuel a planned US$1.2billion fertiliser plant in Nyankrom in the Shama District, which is being negotiated as a joint venture with the Indian government.

    Ecobank’s Middle Africa Energy briefing report, released last week, argues that in comparison to Nigeria and Cameroon, urea production plans in Ghana are likely to face “significant challenges” in view of plans the country has for its gas from the Jubilee oil fields.

    On July 6, 2010, Ghana and India signed a memorandum of understanding for the setting up of the joint venture project in which gas is to be used to manufacture fertiliser.

    Ecobank’s report said the gas-plant being constructed at Atuabo in the Western Region will produce 90 million cubic feet of gas, which will increase to 120 million cubic feet as oil production rises to the peak level of 120,000 barrels per day.

    It however added that because much of this gas will be used for power generation and LPG production, there will not be enough to fuel the fertiliser plant.

    “The [fertiliser] plant will require about 90 to 100 million cubic feet of gas per day, which could be a bit challenging to get based on Ghana’s plans for its gas.

    “On one level, Ghana’s investment in gas infrastructure targets plugging the gap in thermal power generation and Liquefied Petroleum Gas (LPG) demand. Thus, ongoing construction of gas pipelines and a gas processing plant…costing about US$800million, are largely planned for producing gas for electricity and LPG.”

    Speaking to the B&FT, Peter Amewu, Energy Policy Analyst at the Africa Centre for Energy Policy, agreed with the Ecobank report — saying that an integrated fertiliser project would not be feasible “in the short-term”.

    He said although Ghana has the potential to produce more gas beyond the Jubilee Field, none is likely to come on board immediately.

    Indeed, Victor Sunu-Attah, the Project Development Director of the Ghana Gas Company, told the B&FT in September that “whatever quantities of gas that Jubilee is able to provide for the time being will go to the Aboadze Thermal Plant for power-generation.”

    President John Mahama also recently assured sub-regional governments that the country will export Jubilee gas through the West African Gas Pipeline (WAGP) from the first half of next year, suggesting other competing uses for the gas expected will come on-stream.

    “We will pipe gas from our Jubilee and other oil fields into the West African Gas Pipeline (WAGP) as early as the first half of next year in order to make it available to member-states of the WAGP project,” said a statement read for the president at a three-day high level forum in Accra held to deliberate on energy-efficiency and sustainability in the ECOWAS sub-region.

    Yet despite the obstacles, the report noted that the fertiliser play in the sub-region has gained the attention of investors, particularly India which is involved in at least three of the seven projects that have been announced in Ghana, Nigeria and Cameroon.

    The major attraction, it said, is the presence of low-cost (associated) gas which will cost relatively less than un-associated gas and enable cheaper production of urea.

    Business & Financial Times

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