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Ghana Gas reacts to project cost

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The Ghana National Gas Company Limited (Ghana Gas) has explained that it has not inflated the cost of contract for the construction of the 180-mile (290km) gas pipeline from Aboadze to Tema.

According to the company, the actual cost of the project could only be given after the Front End Engineering Design (FEED) has been completed.

The company was reacting to a media publication with the headline “Tale of 2 countries: Ghana gas to build 180-mile gas pipeline at $500m- America builds 570-mile pipeline at $1.2bn”.

The report 

According to the publication, Ghana Gas is paying $2.8 million for every mile of pipeline constructed whereas the US is building a similar gas pipeline at a cost of $ 211,000 a mile.

In statement signed by the Corporate Communications Manager of Ghana Gas, Mr Alfred Ogbamey, to clear the air on the publication, he said the full cost of the project would be announced upon conclusion of the FEED.

Reaction 

Nonetheless, according to the statement the US project cited in the report was the 570-mile mid-western constructed by Oneok Partners between 2011 and 2013 at $1.2billion.

“The Oneok project in question is a 16-inch diameter pipeline per mile for $2.1million (not the $211,000 reported). Again, the 180 mile Aboadze Tema route is projected to use a 24-inch diameter pipeline, which is an increase of 50 per cent in the size of the 16 inch diameter Oneok pipeline.

“Again, the Oneok pipeline is a Natural Gas Liquids pipeline whereas the proposed Ghana Gas project is a lean gas bi-directional onshore natural gas transmission pipeline. Any serious cost comparison should, therefore, consider the technical and functional differences of the installed pipelines and not just linear lengths.

“It remains a fact that the cost of pipeline construction in Africa is generally more expensive than in the US. Basic googling, for example, reveals 2016 estimated $/mile land pipeline average construction costs between $2.5m and $2.8million even in the US”, it explained.

Those, according to the statement, were some of the critical information from the report held back from readers to create its illusion of corruption against the project.

“For example, the report withheld critical details such as the sizes/diameters of the US and Ghana pipelines it compared and the number of ancillary facilities such as compressors, block valve stations, inner coating availability, etc, of the two pipelines”, it stated.

The project 

Per the approval by the government of Ghana to construct the onshore natural gas pipelines facility to link the western and eastern corridors, Ghana Gas signed, on September 7, 2016, a PIA with Yantai Jereh Oilfield Services Group Co Ltd for the FEED.

The project is expected to provide bi-directional transport of gas between the critical load centres of Takoradi and Tema and supply security between the two key market points.

It would also provide supply guarantees and linkages between LNG facilities in Tema and Takoradi, production of gas at TEN Field,as well as upcoming Sankofa Field.

It is projected to handle a maximum capacity of 340 million standard cubic feet of gas per day (mmscfd) in phase one and up to a maximum capacity of 520mmscfd in phase two.

Source: http://www.graphic.com.gh/business/business-news/ghana-gas-reacts-to-project-cost.html

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