Oil imports to be cut by $250m
Ghana will from 2018 save some $250 million annually on crude oil imports to fuel its power plants across the country.
This is because the country will by then be able to substitute oil imports with Liquefied Natural Gas (LNG), of which the former is comparatively expensive) after the Tema LNG import and regasification terminal is opened next year.
The cost of LNG is about 20 per cent less than crude oil. In 2016 alone, Ghana’s oil import was valued at $1.66 billion. If that was substituted for LNG, the country would have saved some $300 million on fuel import.
The Tema LNG project is being developed and financed by Quantum Power, the pan-African energy infrastructure investment platform while Höegh LNG is the FSRU provider and Micoperi is Engineering, Procurement, and Construction (EPC) Contractor.
It would be recalled that government through the Ghana National Petroleum Corporation (GNPC) in 2015 signed an agreement with Quantum Power to build the terminal.
“The Tema LNG Terminal is the first of its kind to be implemented in sub-Saharan African. The terminal will provide Ghana with a highly reliable, flexible, independent and scalable fuel source, while affording significant reductions in power generation costs, with a large multiplier effect on the broader economy,”Chief Executive Officer of Quantum Power, Matty Vengerik said at the ground breaking ceremony of the project at Tema.
It is estimated that Ghana loses between 2 and 6 per cent of its annual GDP due to inadequate and unreliable power supply and the Tema LNG Terminal promises to be a straightforward solution to the shortfall.
“The project will eliminate for the next 10 to 15 years Ghana’s reliance on imported fuel. We will be providing Ghana with the option of having reliable energy for its industries and people…so Ghana will be the regional economic giant it used to be,” Mr Vengerik added.
The state-of-the-art dedicated floating storage and regasification unit (FSRU) to operate on the terminal is nearing completion in South Korea and should arrive on the shores of Ghana in the next few weeks.
Mr Vengerik noted that after the FSRU arrives it will take between 12 and 15 months to complete the terminal and start operation.
The Tema LNG Project, comprising a capital outlay of over $550 million, will be implemented on a build-own-operate-transfer (BOOT) basis with Quantum Power transferring the assets to GNPC after the Project’s 20-year term.
The project will have the scalable ultimate capacityto receive, store, regasify and deliver, at steady state of about 3.40 million tonnes of LNG per year, equivalent to 500 million standard cubic feet of gas per day.
An associated sub-sea and onshore pipeline will deliver the natural gas to GNPC and its customers onshore.
The terminal will have sufficient capacity to provide fuel for existing thermal power plants and ability to support a doubling of Ghana’s power generation.
Reduction in liquid fuel imports and the corresponding foreign exchange savings to the country will be made possible when the Tema Liquefied Natural Gas (LNG) import and regasification terminal is completed next year.