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AfrOil PROJECTS & COMPANIES AfrOil

Rendering of Tema LNG terminal (Image: Helios Investment Partners)

Group of African NGOs calls for

suspension of Tema LNG project

GHANA A group of African non-governmental organ- and local energy markets, as well as updates to
isations (NGOs) has called for the suspension the governance model of the project, among
of the Tema LNG project in Ghana, arguing other changes.
that the deal could end up costing the coun- Additionally, they have raised serious
try $1.5bn, as government officials have noted doubts about the feasibility of the project on the
that there is no immediate demand for the nat- grounds that Ghana had not developed renew-
ural gas that will be imported via the terminal. able energy resources, even though they were
Tema LNG, whose operator is backed by quickly becoming a more economical form of
Helios Investment Partners of the UK and energy.
African Infrastructure Investment Managers “Development finance institutions have
(AIIM) of the Netherlands, is key to Ghana’s spent at least $2.8bn in direct project finance
plans to become a gas hub. The terminal was to support the development of upstream and
originally expected to become operational as downstream fossil fuel projects in Ghana since
early as 2020 but has yet to take delivery of any 2010. Meanwhile, Ghana’s vast renewable
LNG. energy potential has generally been overlooked,”
The group of African NGOs, convened by the statement said. “Ghana’s modern renew-
the African Centre for Energy Policy (ACEP) able generation capacity remains negligible,
and IMANI Centre for Policy Education at less than 1% in 2020. This is despite renew-
think-tanks, issued a statement on November able energy sources, such as solar, now being
9 outlining its arguments for the scrapping of the cheapest form of energy in many parts of
the project. “[The] origins of the Tema LNG Africa, according to the International Energy
project in perverse bid-rigging and attendant Agency (IEA) – and are set to outcompete all
procurement irregularities have heightened the other sources continent wide by 2030.”
corruption risk associated with the project,” the According to previous reports, the Tema
statement 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
Brent crude prices) for gas [that] the country to 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 industries, such as petrochemicals and cement,
to better reflect the current conditions in global Asante told Bloomberg. ™

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