Gazprom
Ghana has signed a new power deal with the world’s largest gas producer, Gazprom, to add up to 1,000 MW to Ghana’s power supply.
The transaction, completed by Energy Minister, Boakye Agyarko and the Chief Executive Officer (CEO) of the Ghana National Petroleum Corporation (GNPC), Dr Kofi Koduah Sarpong, has saved Ghana over $1 billion, according to the Energy Ministry.
The new Liquefied Natural Gas (LNG) deal between Ghana and Gazprom is being hailed within the international energy market as a master stroke.
It replaces two signed competing contracts for the same Tema LNG project by the previous Mahama administration which were both over-priced and over-sized for Ghana.
Over the past decade especially, ensuring reliable and affordable electricity supply in Ghana has been extremely undermined by the limited access to reliable and economic fuel sources.
The West African Gas Pipeline project was the first move by the power sector to displace crude oil and diesel as the principal fuel sources for the thermal plants.
Unfortunately, supply of natural gas from Nigeria via this project has been gravely unreliable.
The World Bank and Ministry of Energy estimate that a total of about 250–300mmscf/d of imported LNG will be needed by 2018 to undergird the supply of gas from the indigenous fields.
In a bid to meet this requirement, the erstwhile Mahama government entered into contracts with three different companies, namely Quantum Power Ghana, West African Gas Limited and Kaheel) for the supply of LNG and the construction of its associated import terminal.
The aggregate contractual commitment made to these companies amounted to 1,000 mmscf/d (only 25% of which was the country’s needs as prescribed by the World Bank and the Ministry of Energy at the time) or $25 billion over the term of the contracts.
From a broader perspective, this was equivalent to more than half of Ghana’s 2016 GDP.
A fourth entity called the Tema LNG (TLNG) also made submissions to the government but were not successful.
Needless to say, if all three contracts were made effective, the country would have suffered a devastating and longstanding impact on its balance sheet.
Under the new agreement, the total cost of gas delivered to GNPC is $7.70/mmbtu.
And this is not just the cheapest among the four projects; it is cheaper than the gas from the indigenous Sankofa gas fields.
– Myjoyonline