Business News of 2014-05-14

Ghana Gas extends completion schedule

Financial and technical challenges have compelled the Ghana National Gas Company (Ghana Gas) to shift the completion and pre-commissioning of its processing plant at Atuabo to the end of July, this year.

This new development has resulted in the reduction of production of oil at the Jubilee Fields from 115,000 barrels per day to 103,000. The completion and pre-commissioning date for the processing plant was set for the end of March, this year.

Information made available to the Daily Graphic indicates that the Jubilee Partners could no longer continue with the re-injection of associated gas from their operation and had to act immediately to protect the integrity of the reservoir.

As a mitigation measure, therefore, the partners have created a by-pass by laying pipes and valves that would take the processed gas from the Jubilee Fields to the Aboadze Thermal Plant.

According to an official source of the lead operator, Tullow Oil, extension of the pipes or flow lines from the FPSO Kwame Nkrumah to Aboadze stretches more than 65 kilometres and will be completed in less than six weeks. Per its design, the FPSO Kwame Nkrumah has the capacity to process and dry the gas for it to be shipped to Aboadze in the Shama District.

30 million SCF

According to the source, the total volume expected to be shipped daily to Aboadze is estimated at 30 million standard cubic feet (SCF), a volume which is enough to feed one generating unit at the power enclave.

That, it said, would enable the partners to maximise production and avoid the imminent threat that would warrant further reduction in the volume of oil produced per day. Checks at the Volta River Authority (VRA) indicated that preparations were going on to receive the gas directly from the FPSO Kwame Nkrumah.

A source said VRA was not left out of the deliberations of the by-pass and was doing everything possible to ensure that the gas met the specifications for the plants.

Ghana Gas

When contacted, the Head of Public Affairs of Ghana Gas, Mr Alfred Ogbamey Tetteh, told the Daily Graphic that the company was aware of the intended by-pass by the Jubilee Partners.

"It is important to note that there are several factors occasioned by the release of funds to sub-contractors, which led to the delay in meeting some of the set target dates," he said.

He said on two occasions, two major sub-contractors demobilised and left the site for more than seven months due to the lack of funds, adding that Ghana Gas lost a vital component offshore, known as the remote operating vehicle (ROV).

Mr Tetteh said it was also important to know that the company was doing everything possible to ensure the completion of the project, adding that "work is more than 90 per cent complete. It is currently left with few minor stuff to be done, as well as connecting the flexible pipes from the FPSO to the riser-platform offshore".

Financial negotiations

Mr Tetteh said the pre-financing negotiations with the Jubilee Partners was not necessarily for the gas plant, but rather some other physical developments that were not factored into the initial project cost.

He said among those projects were the construction of a road from the project site to the main Elubo highway for trucks to haul LPG from the site to the market. The last visit to the site by the Daily Graphic saw sub-contractors doing the ground work, including piping and completion of the LPG tank at the site.