Save 20% off! Get our Magazines and get 20% off right away!

Ghana Gas To Build 2nd Processing Plant, After Atuabo Success. 

Ghana Gas is planning to construct a second gas processing plant to supplement its Atuabo Gas Plant. The newly constructed plant would be expected to double Ghana’s gas processing capacity while having a positive bearing on the country’s economy.  

Atuabo Gas Plant;

The Atuabo plan, Ghana’s first-ever natural gas processing plant, was realized through a billion-dollar joint investment – a US$850 million loan from the Chinese Development Bank and US$150 million in counterpart funding by the Government of Ghana. 

In recent years, the plant found in Atuabo in the Western Region has installed some additional facilities to make its operations more efficient and deliver more reliability. Key among these was the installation of a De-Ethanizer Overhead Compressor at the gas processing plant to ensure outage protection of critical equipment for both planned and unplanned outages. 

The Gesner pipelines and expansion of Takoradi Regulating and Metering Station have enabled the Company to increase its delivery volume from about 90MMscfd to 300MMscfd today. Significantly, the plant has slashed Ghana’s import bill for diesel oil, enabling the country to turn its erstwhile trade deficits into trade surpluses since the end of 2016 without having to engineer a huge increase in export revenues. 

2nd Gas Plant Project; 

While Ghana could follow through with a similar financing structure for its construction as the one used for Atuabo – with loan financing from China being the primary mode – the government is rather looking to leverage local content and participation. 

Therefore, the new plant will involve a private partnership that will finance and construct the plant, and which will subsequently be co-managed by the private partner and Ghana Gas itself, before it is fully transferred to the State. 

The planned new processing plant, which will be located to the north of the Atuabo plant, is expected to be up and running by 2024. Contrastingly, whereas the Atuabo plant was constructed utilizing the technical skills of foreigners, this new plant is looking to take advantage of local expertise and participation.

As part of the indigenization drive of the current CEO of Ghana Gas, Dr. Ben K. D. Asante, 56 Chinese technical experts have been replaced with Ghanaians to ensure the company and its activities are fully run by indigenes.

The contractor for the first project, Sinopec, was previously engaged by Ghana Gas under a Service Contract to operate the plant on its behalf while providing the required technology transfer and training to the staff of the company. 

It is quite impressive to know that the push for complete indigenization hasn’t resulted in any accident or operational failure over the years, and Ghana Gas can boldly boast of having the requisite capacity and expertise to run this plant.  

Currently, Ghana can produce 365 million standard cubic feet per day (mscfd) of gas from two of its three operational oil and gas fields, these being Jubilee and the TEN cluster which produce wet gas; the most recent field commissioned, SankofaGyaname, directly produces dry gas. 

However, the Atuabo gas processing plant’s capacity is less than half of this, at 150 mscfd. This has restricted actual wet gas throughput to 130 mscfd, which is almost the full installed gas processing capacity Ghana currently has.

Moreover, a new processing plant would eliminate Ghana’s retained dependence on the irregular gas imports from the West African Gas Pipeline, and even more importantly would enable the country to substitute imported diesel oil still used as feedstock for power generation with gas which is cleaner, cheaper, and locally sourced. 

Stressing the need for a 2nd plant, Dr. Asante noted, “Gas is cheaper and cleaner than solid fossil fuel and so it represents the best way forward for Ghana.  With Ghana’s industrialization growing rapidly, through initiatives such as one district one factory, and market opportunities for Ghana’s manufactured goods expanding rapidly too, through the African Continental Free Trade Area, the use of gas for power generation holds the best potential for adequate power at an internationally competitive cost for the industry.”

 Ghana Gas is currently saving itself some US$3.5 million a month owing to its indigenization focus. Operational costs which would have otherwise been used on technical staff from Sinopec can be channeled into different areas of operations. 

Aiming for a public-private partnership rather than a bilateral development partner loan to finance the next gas processing plant will force the government to adopt a sustainably viable price structure that ensures Ghana Gas at least gets enough cash flow to keep it going, which will reduce its bridge financing costs.