Tema LNG Company Gets $350m Regasification Project

The Tema LNG Terminal Company Ltd. has signed an agreement with China Harbour Engineering Company for the construction of a Liquefied Natural Gas (LNG) Terminal in Tema.

This LNG Terminal is expected to be completed in 18 months, and will be Sub-Saharan Africa's first regasification terminal, a statement from the Presidency noted.

This deal is 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.

Rosneft subsequently engaged Tema LNG Terminal Company for the provision of the regasification services.

The government expects the project to generate about 1,600 jobs and provide about two million tonnes of liquefied natural gas every year.

“This would mean that the facility would supply about 30% of Ghana's total electricity generating capacity, displacing crude oil and crude derivatives as fuel sources for the generation of power,” the statement said.

“In addition, a concession agreement signed between the Ghana Ports and Harbours Authority (GPHA) and Tema LNG Terminal Company Ltd, to allow for the siting and operation of the facility within the Tema port, will deliver an annual revenue in excess of $6 million to GPHA throughout the total concession period.”

At the signing of the agreement in Beijing, China, President Nana Akufo-Addo said this project was a marker of the efforts his government has put in place over the last 19 months to encourage private sector participation in the growth of the economy.

“If we are going to succeed in pushing the industrial development of our country rapidly, the supply of gas, which will mean even more affordable rates of power to our country is now a matter of very great importance for us,” he said.

The Tema LNG Terminal Project is a private sector funded and driven project, led by established international sponsors, such as Rosneft, the world's largest listed producer of crude oil, and Helios Investments, the world's largest Africa-focused private equity fund. As such, there was no requirement for capital from Government.

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 the government after 12 years.

During the President’s visit, Ghana and China also signed eight Co-operation Agreements and Memoranda of Understanding, in different sectors of their respective economies.

The agreements are the “One belt one road Memorandum of Understanding, Memorandum on Regional Aviation Co-operation Agreement for Co-operation in the peaceful use of nuclear energy, and Co-operation to carry out Maternal and Child Health Project.”