Tullow Oil Plc, has indicated that gas supply from the Jubilee oil field fuels approximately 30 per cent of thermal power generation in Ghana and provides required LPG for the local market.
The oil and gas firm noted it has begun active discussions with its joint venture (JV) partners and the Government of Ghana “for not only the continued offtake of associated gas from Jubilee, but also the non-associated gas resources in TEN”.
“The timely development of this resource will support energy security for Ghana and catalyse industrial development in Ghana. Combined with the progress we expect to make with our carbon offset projects, Tullow will continue to be a leading investor in Ghana with an integrated offer across oil, gas and local content.”
Rahul Dhir, CEO
This notwithstanding, reports surfaced earlier this month that the offtake of gas from Jubilee will no longer be free by year’s end. Ghana has enjoyed free gas supply from the Jubilee field since the erstwhile Kufuor government under a free gas arrangement.
With this arrangement kicking off by the end of the year, this would obviously mean that the cost of the gas supply may impact pricing of power generation.
“The Jubilee Foundation Volume, which we have enjoyed over the years as free gas, is coming to an end. The good news is that it will still be cheaper, but it won’t be the cheapest particularly; it will be more expensive than now,” a GNPC spokesperson said in an interview, earlier this month.
Tullow to Invest in Gas Infrastructure
Tullow also stated in its 2021 annual report, that plans are underway to expand infrastructure in its gas handling structure on the Jubilee floating, production, storage and offloading (FPSO) vessel and the ability to supply Jubilee & TEN gas.
The company underscored that “this gave it confidence that it could meet growing domestic demand and be the most competitive supplier of gas into the Ghanaian market.”
According to ACEP, this however, requires investment in upstream gas production and midstream gas processing infrastructure. “Therefore, if the risk level is high, investments will either come at a higher premium or may not,” ACEP noted.
The energy think-tank said the recent geopolitical issues and their impact on global commodity prices underscore the need for Ghana to focus on developing its domestic gas assets, which required investment.
Despite its zero-flaring policy, data on the volume of gas flared or re-injected in the country’s oil and gas fields was about 246 bcf of gas between 2019 and 2021.
“Out of this quantity, about 46.8 bcf was flared while 199.8 bcf was re-injected. The flared gas from Jubilee and TEN fields could account for a daily supply of about 50 million standard cubic feet per day (mmscfd) if the Gas Processing Plant (GPP) were expanded as scheduled.”
ACEP
Tullow noted that it now has solid financial and operational foundations with a well-defined opportunity set to drive growth and create value and especially undertake these investments in gas handling infrastructure.
“With new leadership at the Board, we are now well-placed to build on these firm foundations to achieve our ambitions in the African oil and gas sector and fulfil our purpose of building a better future through responsible oil and gas development.
“We will do this by successfully executing our long-term business plan which will grow production and generate substantial cash flows to create value for all our stakeholders.”
Rahul Dhir
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