Ghana, in a few weeks’ time will become sub-Saharan Africa’s first ever LNG importer with LNG Terminal facility fully operational at the Tema port.
This comes at a time when a number of LNG export projects are largely operational across North and West Africa. But Egypt in 2015 became the first and only country in all of Africa with a terminal to import LNG. Nonetheless, this is set to change as Ghana prepares to begin LNG imports by the end of March.
“The Terminal at Tema will be mechanically ready for full operation at the end of March,” a project spokesman told S&P Global Platts on March 4.
“We are waiting for Shell, the supplier, and GNPC as the offtaker to decide and confirm the delivery date for their first cargo to arrive at the terminal,” he noted.
Tema LNG Terminal Contract
A shell spokesman during an engagement with S&P Global Platts on March 5 intimated that the company could not give any guidance on timings for the first cargo. Meanwhile, S&P Global Platts could not reach GNPC for comment on the said issue.
According to S&P Global Platts, Helios Investment Partners and Africa Infrastructure Investment Managers financed the Tema LNG terminal. This consists of a dedicated floating regasification vessel and a separate LNG storage vessel. It also has the capacity to import 1.7 million tonnes per year of LNG.
Shell will supply LNG under the contractual agreement involved in the operation of the LNG Terminal. Accordingly, Shell said in a strategy presentation it wanted to grow its LNG market footprint by creating new markets.
In January, Spain’s Reganosa entered into contract to operate and maintain the terminal as well as an associated 6 km gas pipeline.
“Tema LNG’s year-round supply of gas will enable GNPC to supply reliable and cost-effective gas into the Tema power and industrial enclave,” Edmund Agyeman-Duah, the project manager of the Tema LNG Terminal Company, said at the time.
Alternative to the West African Gas Pipeline
The Tema LNG Terminal will add to Ghana’s own gas production and imports from Nigeria via the West African Gas Pipeline (WAGP). Though there is issue with frequent interruptions.
The WAGP is one of two trans-national gas pipelines in sub-Saharan Africa. And also provides Nigerian gas not only to Ghana but also to Benin and Togo.
LNG provides a quick way for African countries aiming at growing gas demand in the coming years for power generation to have easier access to gas supplies.
Risk consultant, Pangea-Risk, earlier indicated that the inclusion of LNG in the energy mix was “critical” for Ghana’s development. This it indicates would boost its clean energy transition with gas displacing heavier fuels.
“By selecting gas as a transition fuel and connecting to the global LNG supply chain, Ghana has secured first-mover advantage in the push for a greener future,” the risk consultancy said.
According to a report published in February by the African Coalition for Trade and Investment in Natural Gas (ACTING), Africa will witness the biggest growth potential in gas consumption by 2040. With an annual growth rate expected at some 3.2%.
“Growth is anticipated to be supported by an increasing policy push across sub-Saharan Africa. This is to further monetize domestic gas, generate electricity, and provide reliable power to industries.”
According to S&P Global Platts, about 13 countries in sub-Saharan Africa burn gas for power generation. Ten (to mention a few- Angola, Cameroon and Nigeria) of which use their own domestic gas production. Togo and Benin are reliant on imports and Ghana uses a combination of domestic and imports.