Parliament on Wednesday approved the gas sales agreement of West African Gas Ltd (WAGL), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), with Government of Ghana.
According to the company, the parliamentary approval and the financial arrangement of the whole agreement revealed “our model simply requires the Government of Ghana (GoG) to establish a Letter of Credit as security for the project infrastructure stage.”
It said the project, to be managed by Messrs Hemla, an international firm which recently completed a similar project in Lithuania, will help to shore up Ghana’s energy production capacity as it would bring much-needed Liquefied Natural Gas (LNG) to the Tema power enclave.
It will also offer a final long-lasting solution to the problem of fuel supply for stranded power plants at the enclave, making the dream of Tema becoming a power hub for the sub-region reality.
“The initiative will be the first in the sub-region with critics even agreeing that the benefits to be derived are immeasurable. It amongst others will bring succour and respite to thermal plants in the Tema enclave that sit idle whilst waiting for gas to power the plants.
“It is envisaged that the successful implementation of the project will usher in a new era in the energy sector, changing the entire energy landscape in the country.”
The project entails the leasing of Floating Storage and Regasification Units (FSRU), the dredging and extension of the breakwater at the Tema Port by at least 300 metres.
Other components of the project include a general upgrade and enhancement of the ports and harbour, the laying of an 8 kilometres pipeline from the Tema jetty to a metering station which would also be built, and the construction of a 320 metres length jetty, among other auxiliary works.
With government running on a tight string budget, the WAGL project offers a major relief to the nation, as the entirety of the project is financed upfront by the WAGL, with the project cost being amortized over the 10-year lifespan.
The WAGL project is expected to supply 180 mmscuf of gas per day to Ghana for 10 years.
A business desk report