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Consortium, Shell start negotiations for gas supply for Ghana 1000 Power Project

13/03/2015
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Co-lead developers  of the country’s biggest stand-alone power projects, General Electric and Endeavor Energy,  and their partners, Eranove and Sage Petroleum, have kick-started Supply and Purchase Agreement (SPA) negotiations with international oil firm, Shell, for long-term supply of liquefied natural gas (LNG) for the Ghana 1000 project. 

The Ghana 1000 project is an integrated gas-to-power project that will consist of 1,300 megawatts (MW) of power to be delivered in two phases, a floating storage and regasification unit (FSRU) as well as related infrastructure necessary to import LNG. 

The project, which falls under the United States’ Partnership for Growth initiative and the Millennium Challenge Corporation’s power compact with Ghana, is expected to be sub-Saharan Africa’s largest power park.

Project promoters believe the project would generate reliable power for Ghana and also help lower the cost of power for the country by up to 35 per cent, compared to power generated from light crude oil.
Agreement

“We are delighted to have reached an agreement with Shell on the key parameters of a long-term LNG supply arrangement and have entered into exclusive discussions on a long-term LNG supply for the Ghana 1000 project,” the Chief Executive Officer of GE Ghana, Mr Leslie Nelson, told a section of the media in Accra. 

“Securing a reliable, flexible and affordable LNG supply arrangement is a critical piece of the puzzle to make this project a reality,” he added. 

The first phase of Ghana 1000 project is expected to be completed in late 2016 to add 125MW to the grid. This will increase to 750MW by 2018 and 1300MW within five years.

The CEO of Endeavor Energy, Mr Sean Long, said the inclusion of Shell would add another world class player to the already impressive roster of participants in the Ghana 1000 project. 

“Shell is the world’s leading LNG supplier and has demonstrated the capability to offer innovative and collaborative solutions for the needs of a transitioning power market such as the one developing in Ghana,” he said, adding that importing LNG offered tremendous flexibility for the country to manage its power fleet.
Power crisis

Part of the country’s current power crisis stems from inadequate and unreliable supply of natural gas from Nigeria’s Niger Delta through the shared West African Gas Pipeline.

Mr Long said as a lower cost alternative to light crude oil, LNG could be used not only on a long-term basis for new power projects, but be imported on a spot basis to balance any short-term disruptions from the country’s domestic gas production or from diminished hydro production in years with low rainfall.

Representatives of the consortium also announced Sage Petroleum, a wholly-owned Ghanaian company and the largest indigenous oil trading company, as the latest entrant to join the Ghana 1000 consortium.

“Sage joining Ghana 1000 fulfills the consortium’s commitment to ensure localisation of operations in Ghana,” they said.

Last month, Endeavor Energy and GE signed an agreement with Excelerate Energy for the supply of floating storage regasification units (FSRU).

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