Ghana’s West African natural gas pipeline delayed to 2014

According to Ghana’s Deputy Energy Minister John Jinapor, Ghana’s natural gas pipeline will not begin pumping gas before next April. This delay postpones a crucial project that is necessitated by the country’s bid to overcome an energy deficit.

The subsea pipeline, which runs from the offshore Jubilee oil field to a thermal plant near the port city of Takordi, has been hit by funding and other delays. The pipeline was initially expected to begin conveying gas this year, but the completion of work on the project was delayed until January 2014.

“By the end of April the facility should be ready. Within Q2 we should be producing gas”, Jinapor told Reuters in London on 18th September.

Reasons for delay

Jinapor has placed blame upon the sinking of a cargo vessel, which was designed to bring equipment for the gas rig. In order to make up for this gas shortfall, the government is spending approximately US$12 million per month in light crude oil.

The pipeline is funded though a loan from the China Development Bank, and a further cause of the delay has been holdups in disbursement of the loan. Only US$ 500 million of US $800 million has been received to date.

"Contractor companies raised invoices and process them for payments. We had a bit of a challenge with the payment but we are now on course. It was a procedural, a bureaucratic problem," Jinapor told Reuters.

Ghana’s power crises

President John Mahama recently named a new board for the Electric Company of Ghana (ECG), after it was fiercely criticised for mismanagement that contributes to the country’s power crisis.

"We've set up a business strategic unit at ECG. We are still in the process of restructuring it and making it more responsive to the needs of the people," Jinapor said.

In another blow to the country’s power production, a ship’s anchor damaged the subsea West African pipeline that brings gas from Nigeria, causing supply interruptions to Benin, Toga and Ghana. The pipe was reconstructed in July, but Jinapor acknowledged supply since then has been unreliable.

“Ultimately our vision is to have our own gas infrastructure, but we will continue our engagement with Nigeria to ensure they take into account their obligations on all sides," Jinapor said.

Ghana discovered oil in 2007 and began producing three years later with British energy firm Tullow Oil. Tullow Oil, which has a 35.5% stake in the Jubilee oilfield, has said it will sell down its stake. Jinapor has refused to comment on whether the Ghana National Petroleum Corporation would seek to increase its 13.6% current holding.

"The maximum Jubilee should produce is about 120 000 bpd. Currently we are doing about 110 000 bpd. Very soon we should be able to get up to capacity. By the middle of next year," Jinapor said.

Edited from various sources by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/20092013/ghanas_natural_gas_pipeline_delayed_to_2014/