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The supply agreement states that the new build FSRU will provide 170,000 cu/m. Pic credit: Golar LNG

In West Africa, a UK-based liquefied natural gas (LNG) shipping company, Golar LNG, has entered into a five-year supply agreement with West African Gas Limited (WAGL) to supply Ghana with a floating storage and regasification unit (FSRU).

Contract clauses

The Golar Tundra FSRU, a product of Samsung Heavy Industries, one of the world’s largest shipbuilders, was delivered to Golar this month.

The contract states that the new build FSRU, will provide 170,000 cu/m.

According to Oil Review Africa, when the contract is up for renewal, WAGL has the option to extend it for another five years.

According to media, Golar LNG expects earnings before interest, taxes, depreciation and amortisation of around $44 million in the unit’s first full year of operation.

Gary Smith, CEO of Golar LNG, said: “[…] West Africa is becoming an increasingly important region for our business and we are proud to be jointly developing Sub-Saharan Africa’s first FSRU in partnership with WAGL.”

Driving LNG operations

WAGL, is jointly owned by subsidiaries of Nigerian National Petroleum Corporation (NNPC) with 60% stake and Sahara Energy Resource with 40% stake, have developed an LNG import project at the port of Tema.

According to Oil Review Africa, the first operations are set to commence in Q2 2016.

Umar Ajiya, MD of WAGL, said: “This landmark achievement is the first of its kind in Sub-Saharan Africa and strategically positions Ghana to be an energy hub.”

Recent developments

In earlier LNG news, a consortium led by US power generation company Endeavor Energy, GE and partners Ghanaian oil trading company Sage and power producer Eranove, entered into negotiations with Shell for a long-term supply agreement for LNG.

This agreement was signed as part of its power-generation initiative, Ghana 1000 project.

The gas-to-power project will have a generation capacity of 1,300MW with the aim to generate affordable and sustainable power to Ghanaian communities, lowering the cost of power by an estimated 35%.

The Ghana 1000 project will be delivered in two phases.

According to a joint company statement, the first phase is expected to be completed by the end of 2016 generating 125MW to Ghana’s national electricity grid.

This figure will increase to 750MW by 2018 and cap at 1,300MW within the next five years.

 

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