Home Energy Electricity could cost more in Ghana as light crude replaces gas

Electricity could cost more in Ghana as light crude replaces gas

474
0

Gas fired power plants in Ghana are resorting to backup feedstock, especially light crude oil, to replaces gas due to chronic epileptic gas supply from Nigeria via the West African Gas Pipeline (WAGP). Gas supplied from Nigeria is used to power plants that provide about 30 percent of the country’s total electricity.

Nigeria is currently battling severe militia attacks that have resulted in damages to several onshore pipelines including some that supply gas from different fields to the WAGP. Ghana faced a period of poor electricity supply in 2015 that resulted in the country leasing power ships to augment the dip in local production. A 59 percent increase in electricity tariff was also implemented to align customer’s bills with the true cost of power generation in the country. While the country is still vulnerable to poor supply in the interim, ongoing gas projects, most notably the Sankofa gas project, could liberate the country from its dependence on the WAGP by 2020. However, the interim measure of substituting light crude for gas is likely to increase the cost of electricity.

Meanwhile, the Ghana National Petroleum Corporation (GNPC) says it expects oil production from the OCTP field development project to start from the second half of 2017. The field is also expected to start gas production in 2018. Although oil production is expected to commence a year before gas, the key appeal of the Sankofa gas field to the Ghanaian government and investors remains its gas potential. Gas production is estimated to peak at 200mmcf/day by 2020.

The project, which will see the development of 500mmbbls of oil and 1.45Tcf of gas reserves, is being carried out by a joint venture, which includes ENI, Vitol and GNPC. Gas supply from the project is aimed at new power plants and replacing light crude in existing ones. Ghana’s 2016 crude oil production is expected to average 110,000b/d similar to 2015 after Tullow Oil restarted production from Jubilee field in May. The production loss from the Jubilee field outage is expected to be augmented by the commencement of production from the TEN project in August. Production from TEN is expected to average 23,000b/d in 2016 offsetting losses recorded during the Jubilee downtime.

LEAVE A REPLY

Please enter your comment!
Please enter your name here