The Africa Centre for Energy Policy (ACEP) has underscored the urgent need to secure funding for Ghana’s second gas processing plant to ensure stable fuel supply for power generation.
The think tank warned that without adequate investment in gas processing infrastructure, the country will continue to waste valuable natural gas resources through flaring, leading to economic losses and increased reliance on expensive and environmentally harmful liquid fuels.
Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at ACEP, highlighted that gas flaring—burning off excess natural gas—has been on a steady rise over the past five years. This trend, he noted, has resulted in significant financial and environmental costs.
“There are considerations around how we secure funding for a second gas processing facility to provide security of fuel supply for power generation, especially when you consider that we have been flaring gas on an increasing trajectory over the last five years.”
Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at ACEP
Gas flaring has long been a concern in Ghana’s oil and gas industry. It occurs when excess gas extracted alongside crude oil is burned off due to a lack of processing facilities or infrastructure to utilize the resource effectively.
This practice not only leads to economic waste but also contributes to environmental pollution through carbon emissions.
Recognizing the urgent need for better gas infrastructure, the Ghanaian government recently announced plans to construct a second gas processing plant.
The proposed facility is expected to bolster the country’s capacity to process natural gas and reduce dependence on imported liquid fuels.
The first gas processing plant, the Atuabo Gas Processing Plant, has played a crucial role in Ghana’s energy mix since its commissioning in 2015.
However, as gas production from the country’s offshore oil fields continues to increase, a second processing plant is necessary to handle the excess gas and minimize flaring.
The government’s plan for a second gas processing facility has been met with approval from ACEP and other industry stakeholders.
However, ACEP cautioned that without securing adequate funding, the project’s full benefits may not be realized.
Need for Investment in Gas Processing Infrastructure
According to ACEP, Ghana’s continued reliance on liquid fuels for power generation is both costly and unsustainable.
Yaotse explained that in the absence of a robust gas processing infrastructure, the country frequently turns to liquid fuels such as diesel and heavy fuel oil to meet its energy demands. These fuels are not only expensive but also produce higher greenhouse gas emissions compared to natural gas.
“If you look at the economic cost of the gas that is being flared and the fact that there are fuel supply challenges, we have to every now and then go to liquid fuels, which are more expensive and also bad for the environment.
“Then we have to quickly secure funding for that [gas processing plant] as well.”
Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at ACEP
By processing and utilizing more of its natural gas, Ghana can reduce electricity generation costs, improve energy security, and cut down on emissions, aligning with global climate goals.
Yaotse also emphasized that any funding arrangements must prioritize the long-term sustainability of the project.
While the involvement of private investors is crucial, the government must ensure that the deal does not place undue financial burdens on the state or lead to unfavorable terms.
The government should aim to strike a balance between securing private investment and maintaining control over its energy resources.
The call by ACEP to secure funding for Ghana’s second gas processing plant highlights a critical issue in the country’s energy sector.
Without urgent investment, gas flaring will continue, resulting in lost revenue, higher energy costs, and environmental degradation.
By ensuring that the necessary funds are available, Ghana can improve its energy security, reduce waste, and support sustainable economic growth.
As the government moves forward with its plans, securing investment and accelerating the construction of the new facility will be essential to transforming Ghana’s gas industry for the better.
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