Business News of 2014-08-29

Ghana set to build 3rd FPSO

Ghana is set to build its third Floating Production Storage and Offloading (FPSO) vessel as part of the process to make the country an oil hub in West Africa.

There is an ongoing tender process to select what the government terms “the best” contractor to build the FPSO and for it to be delivered in the last quarter of 2016. Actual oil and gas production will start in early 2017.

Ghana currently has one FPSO, named after the country’s first president, Dr Kwame Nrkumah. It was delivered to Ghana in 2010 and is currently producing an average of 120,000 barrels of crude oil daily.

A second FPSO, named FPSO J.E.A. Mills, which is currently under construction in Singapore, is 30 per cent complete and would be delivered in the last quarter of 2015. Commercial production of oil would commence on it before the end of 2016.

Speaking in an interview with the Daily Graphic in Singapore, after meeting officials in Singapore to promote investment in Ghana yesterday, the Minister of Energy and Petroleum, Mr Emmanuel Armah Kofi Buah, said the third FPSO would produce more than 150 million cubic feet of gas daily.

“Our oil and gas industry is taking shape and Ghana is gradually expanding its production activities. That will really help strengthen our economy,” Mr Buah stressed.

The minister is on a working visit to Singapore to inspect the progress of work on the second FPSO, which is being constructed at the Jurong Shipyard Limited (JSL).

Officials of Tullow Oil plc, Ghana National Petroleum Corporation (GNPC), the Ministry of Finance, Ghana Petroleum Commission and journalists are on the tour with the minister.

Large quantities of oil and gas have been discovered offshore Cape Three Points in the Western Region by Eni and Vitol, both oil companies.

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The oilfields, christened Sankofa, have large deposits of gas which are expected to power the country’s thermal plants to produce more electricity to bring to an end the frequent power outages being experienced in the country.

More liquefied petroleum gas (LPG) and other petroleum products are expected to come on stream when the FPSO begins production in 2017.

A little over $500 million was spent to import crude oil over an eight-month period to power thermal plants when gas supply from Nigeria to Ghana got disrupted.

Thus, the processing of more gas on the third FPSO would save the government millions of dollars in crude oil imports.

Mr Buah said “We are working very hard to conclude the plan of development (POD) for the development of the oilfields. We intend to conclude the POD as soon as possible to ensure the FPSO and actual oil and gas are delivered by early 2017."

He said “the FPSO would produce the largest amount of gas in the history of Ghana,” and explained further that aside from the production of more than 50,000 barrels a day, the FPSO would produce more than 150 million cubic feet of gas daily.”

Eni and Vitol are the operators of the Sankofa fields, while the Ghana National Petroleum Corporation (GNPC) is partnering them on behalf of the tax-payer.

The most exciting part of the project, the minister noted, was that the third FPSO would be constructed with the active participation of Ghanaian businesses.

“Ghanaian small and medium enterprises are going through series of training programmes to fully take advantage of the local content regulation. This will result in a real quantum leap for Ghanaian businesses in the coming months,” Mr Buah assured.

Source: graphic.com.gh
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