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No Master Plan For Ghana Gas Extraction..Future Prospects Blur

download (2) BY: Mariilyn Badoo.

In April 2015,Ghanaians woke up to the good news that the current ongoing power crisis which is practically collapsing the economic fortunes of the country ,is expected to be mitigated in the coming weeks following confirmation from the Ghana National Gas Company (Ghana Gas) that the Atuabo Gas Plant has begun commercial production of gas. Challenges in the power sector have been attributed to the inability to procure sufficient light crude oil or diesel to bring all oil fired plants on-stream – hence our current experience of what Ghanaians call “DUMSOR “.Unfortunately after four years of Gas extraction in Ghana, the country still lacks a master plan for the resource. Despite several preparatory works, dialogues and workshops, that has gone on, the nation Ghana cannot boast of an implementable regulatory framework for the resource . Having a ”Master Plan” in place would provide the framework for the exploitation of Ghana’s gas potential, where incentives that would attract investors to come in, explore and develop gas fields would clearly be stated. –

In his inaugural address at Atuabo, in the Ellembele District of the Western Region of Ghana, where Ghana’s gas plant is sited, President John Dramani Mahama assured Ghanaians that the gas project was going to push the country’s development to greater heights, helping to stabilize the micro-economy and save the country the trouble of using hard currency to import light crude oil (LCO) to power the thermal generating units. He described the project, as “the game changer for the national economy” and the first national effort at monetizing the country’s domestic associated natural gas from the Jubilee Fields”. The project, he said, would not only benefit the country but also position Ghana as the majority shareholder of 45 per cent and the rest shared among the other investors. The President assured the chiefs and the people of the Western Region that the Free Port was a reality and would come into being, in addition to other industries.

Its been years since extraction began yet there is no regulatory framework in sight. Millions of Ghana cedis are rather being spent to import more natural gas from the Nigerian National Petroleum Cooperation’s (NNPC) which currently pegs its gas price at $3/Mscf, representing $255,000 per day for an 85 MMscfd lean gas, while the ones we have are daily being flared to waste.. For over nine months since its commissioning, it has barely run 50 MMscfd as opposed to its full design capacity of 150 MMscfd. This represents huge economic losses for the country, obviously going contrary to what our president anticipated and “hastily “ assured.

The Atuabo plant is positioned to process more than 180,000 tonnes of liquefied petroleum gas (LPG) for domestic use, representing about 70 per cent of the national requirement of 240,000 tonnes; the delivery of 46,000 tonnes of condensate and about 15,000 tonnes of isopethain which will help reduce pressure on the national currency by reducing the import of these products now available through Ghana Gas.  It has the capacity of producing some 120 million standard cubic feet (mscf) of gas. However Ghana Gas is of the hope that completion of works by TICO will enable them produce full capacity of the 120 million cubic feet of gas which will help ease the power challenges the country is facing.

The inadequate supply of gas has necessitated the use of light crude oil by the Volta River Authority (VRA) to generate power and power generation by light crude oil is typically at much higher cost than gas-fired generation.In summary, the unavailability of gas and light crude oil to run the thermal plants has decreased the supply of power. The supply of power has further been reduced by the low level of water in the reservoirs feeding the hydro plants hence the major reason why ‘dumsor’ has worsened since December 2014.”

The Atuabo Gas Plant begun commercial production of gas and is currently supplying the Volta River Authority (VRA)VRA with 80 million standard cubic feet (mscf) of gas from Atuabo since November 2014. It is expected to increase its supply to VRA, after the completion of the Takoradi International Company (TICO) thermal plant to augment electricity production.

The Atuabo Gas Processing Plant is operated by the Ghana National Gas Company (Ghana Gas).The $1-billion government of Ghana project was started in July 2011, together with a natural gas export station to be constructed at Domuli in the Jomoro District in the Western Region, collectively referred to as the Western Corridor Gas Infrastructure Development Project. The country spends between 20 and 30 percent of its exports earnings to import crude oil and petroleum products. With fluctuating and ever increasing prices of crude, the discovery of natural gas means that Ghana can go in for local production. If this production meets even a third of the country’s needs, it will be able to save around $350 million each year. As a result, this money could be used in other areas of the economy. Ten companies, led by the Sinopec Inc. of China, took part in the construction of the 150 Million Metric Standard Cubic Feet project which spans eight major districts in the region – Ellembelle, Jomoro, Nzema East, Ahanta West, Mpohor, Tarkwa Nsuaem, Prestea Huni-Valley and Sekondi/Takoradi. The same company is also lobbying to construct the second phase of the gas plant.Once again another assurance has been given that SOON a master plan for the country’s Gas extraction will be in sight,it is hoped that it wont be the usual lip-service but a reality this time around.

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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