Ghana Gas strikes deal with Chinese company to construct natural gas pipeline

The Ghana National Gas Company (Ghana Gas) is to construct an onshore 278-kilometre natural gas pipeline infrastructure from the Takoradi Aboadze enclave to the power enclaves of Tema in the Greater Accra Region.

This follows the signing of a project implementation contract with the Chinese multinational oil fields service conglomerate, the Yantai Jereh Group.

The signing of the agreement signifies the revival of the project, which was conceived last year.

Start of work

The Chinese company is expected to start site work, such as topographical/geotechnical site surveys and front-end engineering designs (FEED), which are already underway, as well as on-site civil construction activities which will commence within the next 10 days.

The financial structure of the project includes an innovative 15-year build, operate and transfer (BOT) model in which the Yantai Jereh Group, along with its investment partners, will fully pre-finance all construction activities related to the project, with absolutely no upfront cost being borne by the Ghana government.

A statement issued by Ghana Gas said the entire investment made by the Chinese conglomerate would be recouped by charging transportation fees based on the volumes of gas being moved through the pipeline during the 15-year period.

It said the ownership of the entire infrastructure would then be transferred to the Ghana government, completely free of any recurring charges or financial encumbrances.

“The proposed gas transportation charge of approximately $1.56 per MMBtu (a standard unit of measurement used to denote the amount of heat energy in fuels and the ability of appliances) is a fraction of the $4.05 per MMBtu historically charged by the offshore West African Gas Pipeline Company (WAPCo) for similar natural gas transportation services,” it said.

Advantages

The statement said other advantages of the onshore pipeline included the fact that it would enable Ghana Gas to secure transportation of natural gas energy resources generated from oil fields located in the Western Region to the east of the country, while traversing multiple regions along the coastline of Ghana.

“Multiple regional natural gas distribution stations will be constructed between the two major load centres of Takoradi and Greater Accra, with stations being located in Takoradi, Cape Coast, Winneba, Nsawam and Tema earmarked for phase one, as well as a  potential station in the Volta Region in phase two of the project,” it said.

It said those stations would enable manufacturers wishing to construct factories to connect directly to the infrastructure to receive cost-effective natural gas to power their industrial operations.

The statement said the project marked a momentous milestone for the new New Patriotic Party (NPP) government that had pledged massive infrastructure development and industrialisation initiatives, such as one district, one factory, to spur economic growth.

“This project represents a massive opportunity of growth for both Ghana and the Yantai Jereh Group. We have been highly impressed by the new administration and their ability to get things done quickly and professionally,” Yantai Jereh’s Ghana-based Senior Vice-President for West Africa, Gao Yong, who will take responsibility for the implementation of the project, said.