Latest update November 21st, 2024 1:00 AM
Ghana to now advise Guyana after failing with similar venture
US$900M gas to shore project…
Kaieteur News – Ghana, a West African oil producer whose people are trapped in a lopsided gas deal with oil companies—including ExxonMobil—is now set to advise Guyana on how to best execute its US$900 gas-to-shore venture.
Pipelines associated with the now bungled Sankofa Gas Project in Ghana
According to Head of State, Dr. Irfaan Ali, a technical team from Ghana will be heading to Guyana early next month to advise the country on how it should be going about its US$900M gas project in partnership with ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL).
During a virtual engagement with members of the media yesterday, President Ali said the decision on the visit by the technical team follows a bilateral meeting that was held between a delegation led recently by Vice President, Dr. Bharrat Jagdeo and Vice President of Ghana, Mahamudu Bawumia.
He said the outcome of this meeting will also see assistance from Ghana’s experts on amendments to the nation’s Natural Resource Fund Law as well as is draft Local Content Legislation. Both documents are expected to be tabled and passed in the National Assembly before the end of the year.
Ali said too that the Vice President of Ghana, Mahamudu Bawumia, will be visiting Guyana later this year while adding that it is anticipated that the President of Ghana, Nana Akufo-Addo, would be in Guyana for its International Oil and Gas Expo in February next year.
He said as well that a team of private sector investors from Ghana is expected to be visiting Guyana, in an attempt to forge ties with their local counterparts.
“So in addition to the technical teams and the cooperation at the bilateral level, we have also established an opportunity for cooperation and collaboration and partnership with the private sector from Ghana and that of Guyana.”
President Ali suggested too, that outside of the areas of oil and gas, the Ghanaians have also expressed an interest in Guyana’s other extractive industry namely gold, in addition to Agriculture and Tourism.
As it relates to Ghana’s experience with gas to power initiatives, industry stakeholders are of the view that the country’s Sankofa gas project which was approved in 2015, serves as a warning to Guyana to avoid any hasty pursuit of gas projects.
In a report titled, ‘Guyana’s Gas-to-Power Potential,’ University of California San Diego graduate student Kathryn Hillis noted that Ghana, like Guyana, suffered power outages, and it wanted to reduce power costs, lower emissions and make electricity services more reliable.
That was addressed when Ghana approved the Sankofa gas project in 2015.
According to the World Bank, since the startup of the project, Sankofa resulted in the provision of power to 1.6 million households, decreased oil imports by 12 million barrels a year, and reduced carbon emission by 1.6 million metric tonnes.
Notwithstanding the benefits, the project has brought on extremely costly burdens on the people of Ghana. In summary, it was noted that the Ghanaian market is now severely oversupplied with gas it cannot use and must still pay for. In fact, the government is tied to paying US$500 million annually for unused power. This is due to the fact that Ghana signed a long-term take-or-pay Power Purchase Agreement (PPA) with gas and power suppliers, through which it would have to pay for 90 percent of the produced gas from the field, no matter the demand.
Ghana, which is now trapped in this predicament, will now be advising Guyana on its gas project with Exxon.
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