Page 12 - GLNG Week 46 2022
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GLNG AFRICA GLNG
African NGOs call for
suspension of Tema LNG
project in Ghana
PROJECTS A group of African non-governmental organisa- local energy markets, as well as updates to the
tions (NGOs) has called for the suspension of the governance model of the project, among other
Tema LNG project in Ghana, arguing that the changes.
deal could end up costing the country $1.5bn, as Additionally, they have raised serious doubts
government officials have noted that there is no about the feasibility of the project on the grounds
immediate demand for the natural gas that will that Ghana had not developed renewable energy
be imported via the terminal. resources, even though they were quickly
Tema LNG, whose operator is backed by becoming a more economical form of energy.
Helios Investment Partners of the UK and Afri- “Development finance institutions have spent
can Infrastructure Investment Managers (AIIM) at least $2.8bn in direct project finance to support
of the Netherlands, is key to Ghana’s plans to the development of upstream and downstream
become a gas hub. The terminal was originally fossil fuel projects in Ghana since 2010. Mean-
expected to become operational as early as 2020 while, Ghana’s vast renewable energy potential
but has yet to take delivery of any LNG. has generally been overlooked,” the statement
The group of African NGOs, convened by said. “Ghana’s modern renewable generation
the African Centre for Energy Policy (ACEP) capacity remains negligible, at less than 1% in
and IMANI Centre for Policy Education think- 2020. This is despite renewable energy sources,
tanks, issued a statement on November 9 outlin- such as solar, now being the cheapest form of
ing its arguments for the scrapping of the project. energy in many parts of Africa, according to the
“[The] origins of the Tema LNG project in per- International Energy Agency (IEA) – and are set
verse bid-rigging and attendant procurement to outcompete all other sources continent wide
irregularities have heightened the corruption by 2030.”
risk associated with the project,” the statement According to previous reports, the Tema
said. LNG terminal consists of a floating regasifica-
The organisations also asserted that Ghana tion unit (FRU) with a capacity of 1.7mn tonnes
National Petroleum Corp. (GNPC), the finan- per year (tpy) and a floating storage unit (FSU)
cially strained national oil company (NOC), that can hold up to 160,000 cubic metres of gas.
could not afford to continue with the pro- The facility is already slated to receive LNG from
ject. “GNPC could be paying between $790mn Nigeria under a 17-year supply agreement with
[and] $1.357bn a year (based on average 2022 a unit of Shell (UK), and it will deliver the gas to
Brent crude prices) for gas [that] the country GNPC under a long-term off-take contract.
doesn’t need,” it said. GNPC, which serves as the country’s gas
The NGOs are calling for the public release of aggregator, will mostly make the fuel availa-
all contracts and documents related to the Tema ble for use gas in domestic power generation,
LNG project, as well as all other entities with according to Ben Asante, the CEO of the state-
commercial connections to the initiative. They owned gas utility, Ghana National Gas Co.
have also urged a complete renegotiation of the (GNGC). However, gas will also go to other
financial and commercial terms of the scheme to industries, such as petrochemicals and cement,
better reflect the current conditions in global and Asante told Bloomberg.
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