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Sat, Dec

1,600 JOBS FROM LNG DEAL NPP SAVES NATION $1 BILLION

Business & Economy

About 1,600 jobs are expected to be created from the construction of a Liquefied Natural Gas (LNG) Terminal to be sited in Tema.

About 1,600 jobs are expected to be created from the construction of a Liquefied Natural Gas (LNG) Terminal to be sited in Tema.

 

This follows the signing of an agreement between Tema LNG Terminal Company Ltd., an entity controlled by Helios Investments, the world’s largest African-focused private equity fund, and China Harbour Engineering Company.

Those expected to be employed include engineers, welders, plumbers, drivers, carpenters, labourers, among others, who will be engaged for the 18-month period within which the construction work will be completed.

Afterwards, some additional 100 jobs will be created for skilled and semi-skilled work force who will manage the terminal over a 12-year period.

                                                                                             12-year gas supply

The LNG Terminal is being constructed on the back of a 12-year gas supply agreement that was executed between the Ghana National Petroleum Corporation (GNPC) and Rosneft, a global LNG trader and the world’s largest listed oil producer. Rosneft subsequently engaged Tema LNG Terminal Company for the provision of the regasification services.

When completed in 18 months from now, two million tonnes of LPG will be produced every year, with the ability to augment 30% of Ghana’s total electricity generating capacity.

                                                                                       Renegotiation saves $1billion

The agreement, sealed last Sunday in China, was started under the NDC government but renegotiated by the new NPP government.

The renegotiation led to Ghana saving a whopping amount of $1 billion in the deal which will also shore up Ghana’s power supply to 1,000MW.

The NDC government led by former President John Dramani Mahama before exiting office entered into contracts with three different companies – Quantum Power Ghana, West African Gas Limited and Kaheel – for the supply of LNG and the construction of its associated import terminal.

The aggregate contractual commitment made to these companies amounted to 1000 mmscf/d. But, only 25% of this was the country’s needs, as prescribed by the World Bank and the Ministry of Energy at the time.

A fourth entity, the Tema LNG, also made submissions to the government but was unsuccessful.

But as promised by then candidate Nana Akufo-Addo that when he was given the mandate by Ghanaians he would take another look into the deal, the president walked his talk and directed that the four proposals be evaluated to compare the commercial benefits and see which one best meets the interest of Ghana.

This led to the formation of a committee by the Energy Ministry, to establish a common frame of reference and receive revised proposals from all four entities that would allow for a more transparent, fair and scientific comparative analysis.

The Committee came to the determination that the TLNG proposal offered the best value for the nation.

With the new deal, the LNG Terminal is being constructed on the back of a 12-year gas supply agreement between the Ghana National Petroleum Corporation (GNPC) and Rosneft, a global LNG trader and the world’s largest listed oil producer.

Being the Sub-Saharan Africa’s first regasification terminal, it will strengthen Ghana’s position as a regional trade and energy hub.

                                                                                           $6 million GPHA revenue

Aside this, Ghana Ports and Harbours Authority (GPHA) and Tema LNG Terminal Company Ltd signed a concession agreement to allow for the siting and operation of the facility within the Tema port which is expected to also will deliver an annual revenue in excess of $6 million to GPHA throughout the total concession period.

The cost of the project is estimated in excess of some $350 million, of which $200m would be spent directly in Ghana over the next 18 months.

China Harbour Engineering Company, which is already involved in the current Tema port expansion project, is constructing the marine facilities, whilst Jiangnan Shipyard of China will be constructing the floating regasification facility.

The Terminal will be transferred to government (GNPC and GPHA) after 12 years.

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