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MCC considers liquefied natural gas project in second Ghana compact

Gas flaringThe Millennium Challenge Corporation (MCC) is considering a liquefied natural gas (LNG) project in the development of the second compact for Ghana.

The project if executed will see the country importing natural gas from oil-producing African nations such as Angola and Mozambique and possibly from the United States.

“We have feasibility studies on potential LNG development project,” said Deidra Fair James, MCC’s Ghana Country Team Lead at a press briefing recently held at the US Embassy.

According to Ms Deidra, the Corporation is collaborating with the US Agency for International Development (USAID) on the project.

The Ghana government has already expressed its appetite for LNG to fuel its thermal plants for electricity supply.

The Ministry of Energy and Petroleum has disclosed its willingness to build capacities of players in the LNG sector to ensure proper adherence to international practices and also take full advantage of the numerous opportunities the sector presents.

Mr Benjamin Dagadu, Deputy Minister of Energy and Petroleum made this known at the closing session of a two-day International Workshop on LNG Negotiations in Accra last week.

The Volta River Authority (VRA) has also said it plans to build a floating LNG terminal to receive imported gas that would be used to produce up to 1,500 megawatts of electricity by 2016.

Mr Kofi Ellis, Director of Planning and Business Development at VRA in a recent interview with Reuters news agency said a feasibility would be done by year-end and the next eight months would be spent on raising funds.

He however did not disclose the cost of the project but said that would be determined after the feasibility study is completed.

Ms Deidra confirmed that the VRA is a partner in the possible LNG project considered for the Ghana second compact which is expected to be approved by the US government by June 2014.

The US government over the years has hinted of supporting Ghana in LNG developments. In June 2011, the Ghana Energy Commission received a $691,000 grant from the United States Trade and Development Authority (USTDA), to conduct a feasibility study into the development of a floating LNG storage and regasification unit in the country.

According to officials of both countries, the $691,000 grant will assist the Energy Commission in determining the cost effectiveness and technical viability of the emplacement of a ship-mounted liquefied natural gas import terminal, storage, and regasification unit.

Two US-based companies in February 2012 were said to be in advanced discussions with the Ghanaian government for the supply of liquid natural gas and liquid natural gas regasification facilities, according to a top US diplomat.

“…there were advanced discussions, for instance, with two US participants with the Ghanaian government for the supply of liquid natural gas and liquid natural gas regasification facilities,” said the former US Deputy Assistant Secretary for African Affairs William Fitzgerald during a teleconference with journalists February 22, 2012.

The Ghana government believes that floating storage and regasification unit (FSRU) based LNG solution lowers costs and delivery time and could lower fuel costs by 25% to 35%.

Deputy Energy Minister, Mr Dagadu, indicated that the FSRU strategy is consistent with the country’s aspirations to develop “our own indigenous gas over the next decade because it is a flexible solution using infrastructure that can be removed easily after a 10 year project”.

By Ekow Quandzie

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