Lack of funds delay completion of Atuabo Gas project in Ghana

gas processing plant
Atuabo gas processing plant

Construction of a gas processing plant at Atuabo, in western Ghana, which started in the first quarter of 2012, is yet to be completed and now the Ghana National Gas Company (GNGC) says it is not to blame for the delay in the completion of the project. Atuabo Gas attributes the delay in the execution of the gas project to the lack of funds.

In a statement issued by the company, signed by the Corporate Communications Manager, Alfred Ogbamey, says the project which is now about two years three months old, has suffered a total loss of about 10 months of project time because of financial challenges which Ghana Gas had no control over.

The statement also highlighted that, in September 2012, the EPCC Contractor, Sinopec, was demobilized for three months because of late payments. As a result of delayed payment, Sinopec was unable to pay some of its sub-contractors, including Thermo Design Engineering (TDE) of Canada, the company that fabricated the gas processing plant modules.

Micoperri, the sub-contractor installing the offshore pipeline system, demobilized from site in May 2013 as a result of delayed disbursement and remobilized in December 2013 after it had received payment. The company further explained that TDE refused to ship the last components of equipment for the gas processing plant earlier enough for them to arrive in June 2013 because of delayed payment.
Ghana Gas said it will continue with the primary plan of the installation of a jetty and LPG pipeline as a long-term solution for NGLs evacuation, as it expects the additional gas infrastructure development in the near future.

Ghana has about 800 billion cubic feet (Bcf) of proved natural gas reserves, although the country does not currently produce dry natural gas. After discovering the Jubilee oil field in 2007, Ghana’s energy sector has expanded considerably. The field came online in 2010, and production in Ghana has since jumped from 7,000 barrels per day (bbl/d) in 2009 to 78,000 bbl/d in 2011, and 80,000 bbl/d in 2012. Tullow, the field’s operator, experienced technical problems at the field that caused production to fall well below output goals in 2012. Proved crude oil reserves are 660 million barrels, as of January 1, 2013. However, given recent discoveries and further oil exploration, proved reserves are expected to rise.

Currently, most Ghanaians rely on biomass sources, particularly wood fuels and charcoal, for household needs. Government statistics place consumption of biomass fuels at slightly more than 60 % of total energy consumption in Ghana. However, as part of the Ghana Shared Growth and Development Agenda, Ghana would like to reduce reliance on wood fuels and charcoal by expanding access to the national electric grid and developing oil and gas resources.

Ghana relies heavily on hydroelectricity, which accounts for 85% of electricity generation but past droughts have disrupted supplies and the country hopes to increase electricity generation from natural gas.