China to Build Ghana LNG Infrastructure

Ghana has chosen two Chinese companies to build the infrastructure it needs to import liquefied natural gas (LNG), resurrecting the $350 million Tema terminal project that would make the country the first in sub-Saharan Africa to buy LNG.

Reuters on Tuesday reported that Tema LNG, backed by Africa-focused private equity firm Helios Investment, signed deals with China Harbour Engineering Company to build onshore facilities and Jiangnan Shipyard for a floating storage and regasification unit (FSRU).

The Tema LNG Terminal Project is a private sector-funded and driven project that requires no capital investment from government.

LNG is expected to be sourced by Russian oil giant Rosneft, which has a 12-year deal to supply 1.7 million tonnes per annum (mtpa) with Ghana National Petroleum Corporation.

Ghana has been trying to get an LNG import project off the ground for years, with two leading FSRU operators, Golar and Hoegh, earmarking their giant vessels for the country’s eastern Tema port, only to withdraw due to delays over contracts.

According to government, the FSRU will be ready in 18 months, which means first LNG imports are potentially expected in March 2020, five years after initial start dates when LNG projects were first proposed for Ghana.

The terminal will be able to import 2 mtpa, leaving 0.3 mtpa of supplies either yet to be negotiated or free for spot deliveries.

LNG is currently one of the fastest-growing commodity trades globally, however, Africa is not expected to become a large importer due to its vast gas deposits, much of which are yet to be brought to commercial development.

Still, import projects using FSRUs are increasingly seen as useful to plug supply shortages because the vessels are cheaper and flexible compared to expensive onshore facilities.

Once completed, the LNG Terminal is expected to strengthen Ghana’s position as a regional trade and energy hub and is estimated to generate 1,600 jobs.