Page 8 - Downstream Monitor - MEA Week 32

DMEA CoMMentARy DMEA
Gas flexibility coming to Ghana
Gas can now be moved both ways on a section of the WAGP in Ghana, allowing increased use of its domestic gas resources
AfRICA
WhAt:
Ghana has completed the TTIP work on an offshore gas pipeline.
Why:
This will allow gas to ow from Takoradi to Tema, with further expansion planned.
WhAt next:
Improving pipeline links should reduce take-or- pay pressure on Ghana.
LARGE infrastructure projects are built on a set of assumptions. As these change, projects must adapt – or wither. e West African Gas Pipeline (WAGP) has faced a number of obstacles and changes but news last week demonstrated that the link is taking steps to remain relevant.
e West African Gas Pipeline Co. (WAPCo), which operates the WAGP, has carried out test- ing and commissioning on the Takoradi phase of the interconnection project. As such, gas was successfully transported from the country’s west to Tema in the east, it said on August 6.
WAPCo said the Takoradi-Tema Intercon- nection Project (TTIP) was now running east, at the request of its customers.
The company’s managing director, Greg Germani, described the move as historic. WAPCo is “happy to contribute in a positive way to economic development in the sub-region in general and within the speci c WAGP states by transporting natural gas from sources where there is abundance to other areas which have lit- tle or none”.
Gas can continue to be carried in the usual way, in keeping with the rst plans for the WAGP, moving from Nigeria into Benin, Togo and Ghana.
TTIP was driven by agreements from WAPCo, Ghana’s Energy Ministry, Ghana National Petroleum Corp. (GNPC), Ghana Gas and Eni Ghana. WAPCo’s facilities at Takoradi and Tema were expanded, with a tie-in to Ghana Gas’ facilities at Takoradi.
Work is continuing, with the expansion of the Tema regulating and metering station. is should allow it to meet increased gas needs in the Tema area.
Rationale
Explaining the TTIP work, WAPCo said it had recognised the “changing needs and develop- ments” in the sub-region. Changes were in line with the Economic Community of West African States’ (ECOWAS) plans, which had driven the plan for the WAGP. ECOWAS set up the West African Gas Pipeline Authority in 2003 and has continued to push for increased access to power
in the area.
e statement from WAPCo said upgrading
the link, to allow it to ow in reverse, was the lat- est step in making the WAGP su ciently exible to meet the needs of the sub-region.
There has been some discussion about extending the WAGP further. In 2015, ECOWAS signed a deal with Penspen for the engineering company to carry out a study on its possible expansion. Nigeria has come out in support of such a plan, under a 2016 deal with Morocco. Front-end engineering and design (FEEd) work on such an expansion – which would extend the WAGP from its current 678 km to around 5,700 km – was due to be completed by the end of the rst quarter.
Such an expansion faces challenges, though, given the complexity of the plan, its scale and the number of states it would have to transit.
Some demonstration of the complexities involved come from the tangled history of the WAGP. e link was repeatedly delayed during construction, owing to leaks and occasional out- bursts of violence. When it was up and running the pipe was snagged by an anchor dragging from a ship captured by pirates in 2012. It took around a year to be repaired.
Competition
Gas pipeline schemes, particularly long-distance ones, face competition from LNG import plans. The appeal of LNG as an alternative is being demonstrated in Ghana, among other locales.
e West African state pays $9.8 per mmBtu ($271 per 1,000 cubic metres) under a sales agreement with Eni Ghana, for supplies from the o shore Sankofa eld. e World Bank, in documents exploring its support for the o shore project, calculated the net cost to Ghana at $6.6 per mmBtu ($182.6 per 1,000 cubic metres).
In January, Accra said it had negotiated the price paid down to $7.89 per mmBtu ($218.2 per 1,000 cubic metres). Local Ghanaian reports have put processing costs at $2.8 per mmBtu ($77.5 per 1,000 cubic metres).
When the World Bank set out its reasoning, LNG prices were fairly high. Since then, LNG
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w w w . N E W S B A S E . c o m Week 32 15•August•2019