Erratic power supply from Nigeria via the West Africa Gas Pipeline, the delay in bringing on stream the country’s own gas, and the huge cost involved in running thermal plants on light crude oil have necessitated the need for alternative sources of fuel.
Power supply from Nigeria fell to as low as 50 million standard cubic feet last week — 70 million standard cubic feet short of the contractual volume of 120 million standard cubic feet of gas. The insistence on the contractual volume is hindered by the fact that Nigeria’s domestic demand outstrips its production.
Going into the future, producers expect a peak supply of about 80million standard cubic feet of gas from Nigeria and about 120 million standard cubic feet of gas from fields in Ghana, bringing the total supply to about 200million standard cubic feet of gas per day.
However, Ghana domestic gas requirement for power generation is estimated at 300million standard cubic feet per day, leaving a shortfall of about 100million standard cubic feet.
Quantum Power Ghana Gas, a subsidiary of Quantun Power Services, a pan-Africa industrial investment group focused on power generation and other related infrastructure and commodities, is to invest US$500million in a Floating Storage and Regasification Unit (FSRU) off-shore Tema for the importation of LNG, storage and re-gasification for eventual delivery of gas via sub-sea pipelines to off-takers in Tema.
The project, which has commenced in earnest, is expected to supplement the amount of fuel available in the country for power generation. Large industries within the Tema Metropolitan Area that consume a lot of power will greatly benefit from the project.
Quantum Power Ghana Gas has subsequently signed a collaboration agreement with Golar Energy.
Golar will provide the project with the required floating Liqiufied Narural Gas (LNG) storage and regasification unit (‘FSRU’) as well as certain technical, engineering, design and construction services.
“The FSRU is biggest component of the project and Golar has a FSRU that it’s currently building for the project. It will be finished in November 2015.
“We will be bringing in over 1.75million tonnes of LNG per year. There is even room for upgrades; so depending on the market and what people request, we can bring in more gas.
“This amount will be dedicated to Tema. So while Jubilee and other fields supply the western corridor, the Quantum Project will deal with the Tema area,” said Vicky Nartey Johnson, a Communication Executive of Quantum Power Ghana Gas.
“We are on course with the environmental impact assessment, so we are on course to making sure our project comes on-stream first quarter 2016 without any environmental or regulatory problems,” she said.
Sources of LNG
A project of such magnitude requires a regular and constant supply of LNG from various sources. Quantum is currently engaged in discussions with LNG suppliers around the world.
Managers of the project, which has received backing from the energy and petroleum ministry, said: “We are looking at Equatorial Guinea, Angola, Qatar, Trinidad and Tobago, and Australia for the supply of LNG. We are having negotiations with them to see how we can source this LNG at a very affordable price”.
Government is said to have also offered to help negotiate LNG-purchase with some of these countries, which Anita Compah-Keyeke, Communications Executive with Quantum Gas believes “is a laudable thing because it will help us acquire the LNG at a very good price”.
“So if this initiative is taken up, and it’s negotiated at the government to government level, it will come at a better price.”
She said: “We know that government is in bilateral talks with Equatorial Guinea and Qatar to supply gas at a concessionary price in Ghana. We are hoping that these discussion will yield very good fruit for all of us, but if they don’t we are working and discussing with energy suppliers like British Gas, British petroleum, Qatar Gas all the other major energy suppliers to make sure that if the government to government agreement doesn’t work or delays we have a fall-back plan”.
The company is continuously engaging stakeholders about the project’s impact in order to address any foreseeable challenges that may arise, however unlikely.
“We are in discussions with them to educate/inform them about the project, and also agree with them as to how it will impact their lives. We have also been educating stakeholders on how to live in that area without the pipe causing any harm to them.
“We are also working together with the EPA to adhere strictly to regulations so that we don’t have any form of disaster or problem. The port authorities have been involved in the project since the very beginning. They actually helped us position this project where we have,” Compah-Keyeke said.
“The Quantum Power pipelines will be laid where the West African gas pipeline already passes. So we are sure that location will not interfere significantly with the lives of fishermen, because it is a no-go zone.
“We have also engaged the West Africa Gas Pipeline Company. They gave us a minimum amount of distance to lay our pipes so that there is no any form of interference. So, we are in discussions to also know where exactly we can also put our pipes,” Compah-Keyeke stated.
The prospective off-takers
The company is currently engaged in talks with the Volta River Authority (VRA) and all the IPPs operating in Tema. Power purchase agreements are expected to be signed in the not-too-distant future.
‘From the FSRU we have sub-sea pipes and then we have on-shore pipelines. When the pipes come onshore they go straight to a metering station. From the metering station we then know how much each IPP is taking. Then we send it off to them according to how much they have bought,” Compah-Keyeke said.
The Quantum project is expected to address the challenges in supply of cheap fuel for power generation and ensure a reliable power supply to industries for power generation.
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