West African Gas secures parliamentary approval for gas supply project

The initiative of the Government of Ghana to address the current Power Crisis via its agreement with the West African Gas Ltd (WAGL), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), has received a major boost following the approval from the Parliament for its proposed Gas Sales Agreement with the Government of Ghana.

The Parliament granted its approval for the Project to go ahead on Wednesday 19th October, 2016. The project entails the leasing of Floating Storage and Regasification Units (FSRU), the dredging and extension of the breakwater at the Tema Port by at least 300metres.

Other components of the project include a general upgrade and enhancement of the Ports and Harbour, the laying of an 8km pipeline from the Tema jetty all the way to a metering station which would also be built, and the construction of a 320m length jetty, among other auxiliary works.

Eventually, the FSRU is booked to dock at a site suggested and proffered by the Ghana Ports and Harbours Authority after series of meetings and deliberation by all stakeholders in this project.

The initiative will be the first in the sub region with critics even agreeing that the benefits to be derived are immeasurable. It amongst others will bring succour and respite to thermal plants in the Tema enclave that sit idle whilst waiting for gas to power the plants. It is envisaged that the successful implementation of the project will usher in a new era in the Energy sector, changing the entire Energy landscape in the country.

With government running on a tight string budget, the WAGL project offers a big relief to the nation as the entirety of the project is financed upfront by the WAGL with the project cost being amortized over the 10-year lifespan.

An official of WAGL commenting on the parliamentary approval and the financial arrangement of the whole agreement reveals “our model simply requires the Government of Ghana (GoG) to establish a Letter of Credit as security for the project infrastructure stage.” He further opines “the premise of the security requested is to amongst others, secure all the infrastructure work which is to be amortized over the life of the Project.”

The WAGL project is scheduled to supply the country with 180mmscuf of gas per day for a period of 10 years. This was after the government had engaged in intensive negotiations with WAGL to reduce the cost.

The merits of stable power supply to Ghana's economy cannot be over emphasized as nations seeking to achieve grand strides in industrialization need a robust and sustainable power sector. Consequently, this project is viewed as long overdue and a development that signposts a sure drive towards accelerated economic growth in Ghana.

The project would be managed by Messer’s Hemla, a firm with vast experience in such projects having

recently completed a similar project in a more congested port in Lithuania.

When completed, the WAGL gas project will help significantly in shoring up Ghana’s energy production capacity as it would bring much-needed Liquefied Natural Gas (LNG) to the Tema power enclave. It will also bring a final long lasting solution to the problem of fuel supply for stranded power plants at the enclave making the dream of Tema being a Power hub for the sub region.