Sinopec ready to provide funding for second phase of gas project

Chinese oil giant Sinopec International Petroleum Service Corporation has made an offer for government to allow it to begin the next phase of the Ghana Western Corridor Gas Infrastructure Development Project, as it is confident it has the capacity to pre-finance and ensure early completion of the project.

The company in its earlier arrangement was able to raise funding toward construction of the Atuabo Gas processing plant with about US$1million within one year to complete development of the gas plant, which has helped the economy save about US$500million.

“Sinopec is ready to pre-finance the industrial development of Esiama to Prestea project if given the go-ahead to commence operation.

"It is not up to us to decide. We are always open for such kind of cooperation. China  has the advantage to provide financing support," Sinopec's Director, International Business Unit, Africa Region, Shen Yan told B&FT in an interview in Beijing, China -- saying that "the company invested over US$1million within one year just to make  the project come on stream  as planned.

"Without Sinopec pre-financing, I can say that most likely the project would still not be in place."

She disclosed that: "Up till today we have helped Ghana to safely run and operate the very first gas infrastructure for 352 days, and to produce and process natural gas of 532million cubic metres; Liquified Petroleum Gas of 71,330.65 tonnes; and Gas condensate of 17,612.40 tonnes.

"All these facilities have helped Ghana save about US$500million in foreign exchange reserves for buying light crude oil for power generation every year."

Yan said it is important for phase-two of the project to be implemented as soon as possible, since it is vital to the whole project and will present a much safer way of transporting the gas and liquids from the region to Tema.

The second phase of the gas project includes constructing the Esiama- Prestea industrial development project that will export the LPG and condensates through offshore facilities by a jetty loading and unloading system.

This will provide the requisite facilities for the plant to export Liquefied Petroleum Gas (LPG) from Atuabo to Domunli, from where it will be transported by ship to Tema, and also to bring in Liquefied Natural Gas.

The entire project has been divided into a number of stages, and the first is to bring the gas from Jubilee to Atuabo, install a processing plant, supply gas to the Aboadze power plant, and export LPG and Condensates using oil tankers by road.

The facility at Domunli will also have a 15-day capacity storage facility for the natural gas liquids, a feature the plant at Atuabo does not have.

B&FT has gathered that Sinopec's Engineering Advisor has begun the Front End Engineering Design (FEED) to allow them to determine the project’s specifications including costs, capacity, and pipeline routes among others.

The Atuabo plant is currently processing about 100 million standard cubic feet of gas from Jubilee: about two-thirds of its installed capacity of 150MMSCFD per day.

The US$1billion Gas processing project at Atuabo was constructed with financing from the China Development Bank loan.  The construction began in April 2012 and was completed in August 2014, and has now been commissioned for full operation.

The full operation of the gas plant is expected to ease the power crisis of the country, as it will process raw gas into liquified petroleum gas and liquified natural gas for the country’s thermal plants.

The gas plant, which is predicted to be an economic game changer, will empower Ghana's quest to be a power exporter in sub-region.

Government has already hinted that a gas master-plan is being finalised to aggressively develop the country's gas potential for a sound economic take-off.

The master-plan will be presented to Cabinet for approval soon, and will incorporate development of gas policy and a gas Act that will provide a transparent regulatory framework for the industry.

The gas sector regulations are expected to help address infrastructure and funding issues, institutional mandates for gas sector agencies, as well as to provide a revised gas pricing policy that will reflect the country's developmental priorities.