HomeIndustry SectorsFinance and PolicyGhana secures finance for US50m LNG gas import terminal

Ghana secures finance for US50m LNG gas import terminal

In Ghana, a subsidiary of industrial investment group Quantum Pacific has signed a deal with London-based Golar LNG to build a US$500-million liquefied natural gas (LNG) import terminal in a bid to address the country’s power crisis, reports Reuters.

The LNG facility, to be situated offshore from the eastern port city of Tema, will provide gas directly to the state-run Volta River Authority (VRA) by mid-2016 to boost power generation, said Don Ackah, chief executive of Quantum Power Ghana Gas.

Under the deal, Golar LNG will provide an offshore floating storage and regasification unit. Talks are also underway with French oil services firm Technip to construct subsea and onshore pipeline networks to deliver gas to Tema, Mr Ackah said.

The floating unit, currently being constructed by Samsung Heavy Industries in South Korea, will have the capacity to deliver at least 250 million cubic feet of LNG per day, or 1.75 million tonnes annually, Ackah said.

Ackah said President John Mahama, who has instructed his economic team to provide cheaper alternatives to light oil for power generation, endorsed the Tema LNG project.

The VRA says it spends around US$20 million every fortnight on crude oil purchases, putting further pressure on a country struggling to cope with a mounting budget deficit.

Ackah said: “A lot of work has already been done with payments committed to parts of the Tema LNG project. We are now aiming to complete all government approvals and secure gas supply and sales agreements for a final investment decision in the last quarter of this year.”

Supply of liquified natural gas

He said Quantum Power Ghana was in talks with global oil firms, including BP, for the supply of natural gas.

In addition, the Ghanaian government said it planned a state-to-state supply arrangement with Qatar for LNG to be delivered to the terminal.

“The government is only playing a facilitating role to get gas at a cheaper cost for consumers,” Ackah added.

Ackah said the offshore production unit is expected to arrive in Ghana under a lease agreement by January 2016, adding that all subseas construction should be completed by December 2015.