Ghana in drive for long-term energy security
Hard hit by gas supply shortage to its power plants in the early part of the year due to a significant reduction of the fuel from Nigeria, Ghana is taking steps to diversify its energy sources to achieve long-term energy security in the country.
The power crisis experienced by Ghana as a result of Nigeria’s failure to meet the gas supply obligations to the country by more than 50 percent of the contractual volume forced the Ghanaian President John Mahama to send the country’s energy and petroleum minister in March to Nigeria to hold talks with his Nigerian counterpart in a bid to addressing the crisis.
Contractual volume of gas supply to Ghana through the West African Gas Pipeline (WAGP) is 120 million standard cubic feet per day (mmscfd). But WAGP gas supply fell to about 30 mmscfd earlier in the year.
As a result of supply shortfall from the WAGP, the country had to resort to use of heavy oil at its dual-fuelled power plants.
In 2012, WAGP shipped an average of 65 mmcfd of natural gas and the pipeline was shut down later in the year, following damage to the Togolese section of the pipeline, after suspected oil thieves vandalised the pipeline. Protracted delays in repairing the pipeline resulted in no gas supply to Ghana for several months from WAGP. In 2013, about 40-50 mmcfd was supplied to Ghana.
450MW floating power stations
In what is the latest step by the second-largest economy in West Africa, the government of Ghana has reached an agreement with Turkish power vessel maker Karadeniz Holding to deliver two floating power stations that will supply 450 megawatts (MW) to the national grid over the next ten years.
The floating stations, which are typically built from converted freighters, will likely berth offshore Ghana and connect to the national grid through the Takoradi or Tema transmission systems. The first vessel is expected to be delivered in the first quarter of 2015.
The contract could potentially be extended for another 10 years afterwards, according to energy analysts at Ecobank in report last week. “The vessels can use fuel oil or natural gas to generate electricity, hence offers Ghana an opportunity to also monetise its gas reserves,” said the analysts including Dolapo Oni.
Offshore gas reserves
Ghana is also looking to its offshore gas fields to meet its future energy needs. The gas reserves at Anglo-Irish explorer Tullow’s Jubilee and TEN fields, as well as Italian IOC ENI’s Sankofa and Gye Nyame fields have been put at about 3 Tcf and could play a critical role in meeting Ghana’s future energy demand.
“The future for us is to depend on our own gas. We cannot 100 percent depend on them [Nigeria]. The future is to get this gas from Ghana and to have LNG and invest in LNG infrastructure; that’s what we are looking at. The future is to get that massive infrastructure in this country to help drive thermal generation to drive the economy. The levels [of gas from the fields in the country] are high,” said Isaac Kirk Koffi, chief executive of the Volta River Authority (VRA) said last year.
Gas processing plant to come online this year
“We are investing a lot in the gas processing plant at Atuabo in the Western Region of the country,” Kamil Mohammed, president, Ghana Oil & Gas Service Providers Association (GOGSPA), told BusinessDay West Africa Energy by phone.
Ghana is expected to commence production of about 150 mmscf of natural gas daily by September from Tullow Oil’s Jubilee oilfield.
The Ghana Gas Infrastructure Project at Atuabo, which is to process raw gas from the Jubilee field, was expected to be completed by the end of April this year. The delay in the completion of the project has been attributed to some technical challenges being tackled. Mohammed noted that as part of the government efforts to diversify the country’s energy sources, the Biu hydro power project was recently commissioned.
“We are not likely to get more gas from Nigeria because Nigeria is getting good prices for the commodity from new markets in Europe. Ghana must therefore develop her own sources of gas,” Mohammed Amin Adam, executive director, Africa Centre for Energy Policy, was quoted to have said.
LNG regasification infrastructure
In March, American firm HR Wallingford commenced an advanced study to support the development of Ghana’s liquefied natural gas (LNG) regasification infrastructure.
The planned LNG facility is expected to deliver enough gas to produce 1000MW from 2016. At peak capacity, the plant will generate 450 mmcfd and could be expanded further if gas demand exceeds this level.
“The LNG plant is significant for Ghana’s long-term energy security as the country’s gas production from its own reserves is unlikely to keep up pace with its energy needs. Furthermore, supply from the WAGP is unlikely to be sufficient despite recent increases in WAGP supply,” said energy analysts at Ecobank.
Growing gas demand in the country
Ghana currently needs 244 mmcfd to power its gas-fired power plants and for re-injection into oil fields.
By 2018, Ghana will require more 800mmcfd for its power plants, to satisfy demand from industrial customers and the Liquefied Petroleum Gas (LPG) segment.
While Ghana’s offshore gas fields hold at least 3 trillion cubic feet (Tcf) of natural gas reserves and could contribute an estimated 500mmcfd to the domestic market, supply from these offshore fields are currently hampered by delays in the development of gas infrastructure.
Although more expensive than piped gas, a planned floating regasification facility offshore Ghana would potentially supply 450mmcfd from Q4 2016 and effectively match Ghana’s gas demand in the medium-term, according to the Ecobank report.
Over the next few years, the country’s gas demand is expected to increase significantly; first to around 511 mmcfd in 2015 and then to 722 mmcfd in 2016.
The government hopes to generate 5,000MW of electricity by 2017, with several gas-fired power plants expected to come on stream over the next few months. The plants which include an additional 360MW of capacity at the Sunon Asogli plant, 230MW Kpone thermal plant and TAQA’s new 300MW plant are expected to be completed in 2015 and 2016 and will require gas volumes of about 500 mmcfd. WAGP, which runs from Nigeria’s gas-rich Niger Delta region to Takoradi in Ghana, until recently was the only source of gas supply for Ghana. At full capacity, WAGP can provide 120 mmcfd, just under half of Ghana’s gas requirement.
FEMI ASU