Prioritise locally produced gas over imported LNG - Ghana Upstream Petroleum Chamber

The CEO of the Ghana Upstream Petroleum Chamber, David Ampofo, has said the locally made natural gas offshore and the imports from Nigeria is sufficient enough to satisfy the demand for gas in the country hence it should be prioritized.

He said the already existing offshore natural gas plants can provide more than the country needs.

“The importation of LNG is rather late in the day as it was conceived at a time when there was an insufficient and irregular supply of gas. Today, the Jubilee, TEN, Sankofa fields and WAGP can more than provide for the country’s needs,” he said.

As part of the government's effort to attract foreign direct investment into the oil and gas industry, the policy for managing natural gas resources associated with oil production can send a positive or negative signal to investors.

“Oil recovery is directly linked to gas recovery, making the failure to evacuate the gas offshore Ghana, compromise the production of crude oil and reduce oil revenues. It is a big disincentive to investors in the oil and gas industry if domestic gas is not fully harnessed,” he explained.

Explaining the issue on LNG imports being cheaper, Mr Ampofo said “it would be helpful to have an indication of the cost-benefit analysis on LNG import to Ghana in relation to price; to compare locally produced gas to imported LNG on a one-on-one basis does not really paint an accurate picture. There are so many other allied benefits to the economy that are associated with domestic production of oil and gas born out of significant foreign investment”.

Speaking on why the need for an LNG facility and whether or not the domestic gas isn’t reliable, Mr Ampofo said, “there were periods in the past during which there was an irregular supply of gas from offshore Ghana and Nigeria. That is no longer the case.”

He explained that the energy security challenge of the country is to ensure the supply of adequate and reliable modern forms of energy for economic development. “Gas has increasingly become the resource of choice and we have it in abundance. Today, the Jubilee, TEN and Sankofa fields and the imported gas from Nigeria more than provide for the country’s needs. In my view, the government’s capacity to support the evacuation of the significant un-utilized domestic gas from our oil fields is key to Ghana’s energy security. That is certainly good for Ghana,” he stated.

Mr Ampofo noted that Ghana should focus on fully developing its offshore potential. He said locally produced gas provides additional benefits such as the condensate and LPG yield to GNGC. “In fact, it is estimated that over 30% of LPG distributed in Ghana comes from offshore through GNGC. There are so many allied businesses associated with the domestic producer creating significant investments in the economy.”

“Also, we should know that oil recoveries are directly linked to gas evacuation. The failure to evacuate the gas compromises the production of crude oil and is a big disincentive to investors in the oil and gas industry. So it’s crucial that domestic gas is adequately evacuated for optimal profits from crude to be realized,” he added.

Mr Ampofo noted that the Chamber will be publishing a position paper detailing what industry concerns are.

“Together we can all situate the various developments into an overarching energy policy framework. Such transparency and policy alignment provide the impetus for future investments,” he said.

However, Mr Ampofo said “it is important that the industry be heard. GNPC is a partner to all the International Oil Companies operating in Ghana. So, coming together to discuss this dispassionately can only be good for Ghana.” He said