Liquefied Natural Gas (LNG) company, Ecow-Gas, a newly created Netherlands-based infrastructure development company is planning to build and operate a number of new LNG facilities in countries across West Africa, S&P Global Platts indicates.
The company’s goal with this move is to improve market penetration for the fuel in the region. According to reports by S&P Global, Ecow-Gas is an affiliate of the Tema LNG Terminal Company (TLTC) that owns the soon-to-be commissioned LNG import facility in Ghana.
Furthermore, S&P Global Platts’ findings also suggest that Ecow-Gas has also won exclusive rights to build and operate storage and regasification facilities in two West African countries- Liberia and Sierra Leone.
According to S&P Global Platts, the Tema LNG terminal will act as a regional hub, with shippers being able to bring small-scale Liquefied Natural Gas into Liberia and Sierra Leone by reloading from the Tema facility.
With this kind of investment, it is likely going to improve the overall economics of small-scale LNG in the region as the terminal can reload any amount of LNG from 7,000 cubic metres to 30,000 cubic metres, ensuring that supply to smaller regional markets can be flexible to their demand.
Accordingly, the completion of the construction of the Tema LNG terminal is expected to create an Liquefied Natural Gas hub with a storage capacity in excess of 180,000 cubic metres to serve the regional market.
By this move, it means that the need for countries to source huge capital expenditure and credit costs to introduce large amounts of Liquefied Natural Gas into new countries has been removed.
In an interview with a source close to the deal, S&P Global Platts learnt that with this new deal, “countries can share risk and absorb capacity as demand fluctuates.”
Additionally, considerations are given to the fact that inland markets such as Burkina Faso could take Liquefied Natural Gas by truck given that the Ghana facility also has the ability to load LNG directly onto trucks, S&P Global Platts opines.
The West African Power Market for LNG
Moreover, the regional market has a huge extractive industry with an appetite for electricity that is currently mainly served by distillate fuels at high prices.
Similarly, the region’s required capacity of LNG is estimated at some 1 million mt/year of LNG across the region for power generation and displacement of distillates in the extractive sector.
As such, this is expected to grow to about 1.8 million mt/year over the next decade as countries in the region invest in further generation and the transition away from heavier fuels continues.
Platts also learnt from sources with knowledge of the company’s efforts that “the construction of this network of LNG storage and transfer facilities will facilitate the deployment and use of gas to spur the economic development of countries throughout the ECOWAS region”.
This appears to be an opportunity for Ghana to supply LNGs to its peers, although some CSOs, even before the arrival of the LNG regasification facility, opposed such an idea.
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