The West African state of Ghana is on its way to being a net exporter of natural gas, with the gears in motion for a new plant that would process about 150 million cubic feet of gas each day from the Jubilee oil field just off the country's southwestern shoreline. The project has been held up by difficulties in securing payment for China Petroleum and Chemical Corp. (NYSE:SNP), or Sinopec, which is behind the facility's construction.
To pay Sinopec, Ghana depends on the China Development Bank, or CDB, which pays on behalf of the Ghana National Gas Company, as part of a 2011 agreement for a total $3 billion in loans from the CDB to Ghana. With payments lagging for months due to procedural difficulties, Sinopec has been losing workers from its various subcontractors. But last week, $188 million of those funds were delivered to Sinopec by CDB, allowing Ghana to ramp up progress on the natural gas plant.
Ghana National Gas CEO Sipa Yankey told the Daily Graphic that plenty has already been done since the funds went through. “Presently, two major facilities for processing of natural gas ... and a liquefied petroleum gas facility have been installed following the resumption of work, while the hooking up of pipes was also being carried out,” Yankey said. “Although we have lost two months of activity, which could impact negatively on the commissioning schedule, we are working very hard to meet the stipulated deadline of completion."
Officials admit that the plant may not become fully operational until 2014. Ghana is struggling to generate enough power for its fast-growing population of more than 25 million. The government estimates that daily demand stands around 1400 megawatts and is rising by about 10 percent annually. The lights stay on for the most part, but power shortages aren't infrequent.
Once operational, the Sinopec gas plant will supplement what Ghana already derives from imports as well as domestic assets, including hydropower, coal and oil. That will be a boon for development in the West African country, which has recently achieved middle-income status, according to the International Monetary Fund. Ghana currently imports some of its natural gas from Nigeria via the West African Gas Pipeline, which supplies several states in the region. But with the new facility in the works, Ghana could become the region's next big supplier of natural gas.