The Ministry of Energy is in the process of submitting a proposal for the construction of a new refinery in Tema to replace the 45,000b/d capacity Tema Oil Refinery (TOR), according to S&P Global Platts.
This development is in contrast with several assurances by the government to make TOR a premium refinery in West Africa. Nonetheless, this comes at a time when Ghana’s only refinery, the Tema Oil refinery (TOR) is still in operation, albeit operating intermittently.
More so, this suggests that the government’s earlier announced plan in 2019 to build a new oil refinery to replace TOR is still being followed through and has not been abandoned after all.
This notwithstanding, a section of the public including some analysts have time and again indicated that the government should forestall the refinery from collapsing. Several insinuations to the government have been to retool the refinery to make it work again. Albeit, this request may be run over with the government’s intention to replace it with a new refinery.
Others have also called for an allowance for private entities to own stakes in the refinery with government. Such an effort when considered will revamp the refinery and push appropriate investments into the running of the refinery. This will also lead to the acquisition of modern tools and equipments and the right management of the refinery which will suffice to turn its fortunes around.
Over the years, TOR has been plagued with series of problems that undermine its great potential of refining crude oil into various petroleum products. These include Liquefied Petroleum Gas (LPG), gasoline (petrol), kerosene, gas oil (diesel), aviation turban kerosene, and premix, etc; The kind of investment that previously could contribute between 5 percent and 10 percent of Ghana’s GDP, but no more due to gross inefficiencies.
Tema Oil Refinery’s intermittent shutdowns
In July 2020, the Tema Oil Refinery was shut down as a result of the lack of crude oil for use by the refinery, only to come back online in January, 2021.
By January 2021, the refinery’s capacity had waned, producing at a maximum of 28,000 b/d, which reflects about half of its total capacity. This was due to the breakdown of some of its machinery, such as its residual catalytic cracker. Within this period, its crude distillation unit (CDU) was functioning on only one furnace.
A month after correcting the technical issues with the refinery, it was shut down again due to technical inefficiencies which resurfaced and thus required urgent attention.
Meanwhile, some analysts have alluded to the lack of proper management, improperly directed investments, and retooling and equipment as the challenges facing the refinery. These have over the years been labelled as the key challenges that have led to the recurring problems of TOR.
Apart from this, S&P Global Platts also cites that the government is seeking to construct a new refinery with a capacity of 150,000 b/d in Takoradi. This new refinery, the government has planned building is separate from the refinery underway in replacement of TOR.
It can be recalled that, the Integrated Social Development Centre, ISODEC in later part of 2020, alleged that government’s plan is to set up a new refinery in the Western Region to replace TOR, rendering TOR as just a tank farm. Nevertheless, information from S&P Global Platts proves that the refinery in Takoradi will add to the new refinery in Tema.
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