Agreement for construction of Tema LNG Terminal project signed

Tema LNG Terminal Company Ltd., an entity controlled by Helios Investments, the world’s largest Africa-focused private equity fund, on Sunday, 2nd September, 2018, signed an agreement with China Harbour Engineering Company, for the construction of a Liquefied Natural Gas (LNG) Terminal to be sited in Tema.

The LNG Terminal is being constructed on the back of a 12-year gas supply agreement that was executed between the Ghana National Petroleum Corporation (GNPC) and Rosneft, a global LNG trader and the world’s largest listed oil producer. Rosneft subsequently engaged Tema LNG Terminal Company for the provision of the regasification services.

The LNG Terminal, which will be completed in 18 months, will be Sub-Saharan Africa’s first regasification terminal, strengthening Ghana’s position as a regional trade and energy hub. The project, which will generate some 1,600 jobs, is estimated to provide about two million tonnes of liquefied natural gas every year.

This would mean that the facility would supply about 30% of Ghana’s total electricity generating capacity, displacing crude oil and crude derivatives as fuel sources for the generation of power.

In addition, a concession agreement signed between the Ghana Ports and Harbours Authority (GPHA) and Tema LNG Terminal Company Ltd, to allow for the siting and operation of the facility within the Tema port, will deliver an annual revenue in excess of $6 million to GPHA throughout the total concession period.

Witnessing the signing of the agreement, in Beijing, China, as part of his official visit to that country, President Akufo-Addo indicated that the Tema LNG Terminal Project is testament to the efforts his government has put in place over the last 19 months to encourage private sector participation in the growth of the economy.

The President noted that the construction of the terminal is in line with the commitment of his government to providing Ghana with constant, reliable and affordable power supply. He stressed that “if we are going to succeed in pushing the industrial development of our country rapidly, the supply of gas, which will mean even more affordable rates of power, to our country is now a matter of very great importance for us.”

The Tema LNG Terminal Project is a private sector funded and driven project, led by established international sponsors, such as Rosneft, the world’s largest listed producer of crude oil, and Helios Investments, the world’s largest Africa-focused private equity fund. As such, there was no requirement for capital from Government.

The cost of the project is estimated in excess of some $350 million, of which $200m would be spent directly in Ghana over the next 18 months. China Harbour Engineering Company, which is already involved in the current Tema port expansion project, is constructing the marine facilities, whilst Jiangnan Shipyard of China will be constructing the floating regasification facility.

The Terminal will be transferred to government (GNPC and GPHA) after 12 years. Present at the signing ceremony were the Minister for Roads and Highways, Hon. Kwasi Amoako-Atta; Minister for Railways Development, Hon. Joe Ghartey; Minister for Agriculture, Hon. Owusu Afriyie Akoto; Minister for Information-designate, Hon. Kojo Oppong Nkrumah; and the Chief Executive Officer of the Ghana Investment Promotion Centre, Mr. Yofi Grant, amongst others.