Gas infrastructure for Ghana’s energy transition

Ghana

Frederick Hesse-Tetteh, co-chief executive officer at Harlequin Oil and Gas, talks to The Energy Year about the importance of competition in the natural gas sector and current opportunities and projects in and outside of Ghana. Harlequin Oil and Gas provides fabrication and engineering, procurement and construction services for the entire value chain of Ghana’s energy industry.

How will the energy transition take place in a country like Ghana?
As an African nation, the natural energy transition will be to shift to gas before renewable sources of energy such as solar and wind. Currently, Ghana burns crude oil, heavy fuel oils, diesel and gas to generate electricity using thermal power stations. Over the last few years, indigenous gas from the Sankofa, Jubilee and TEN oilfields has contributed immensely to Ghana’s energy security, and efforts to reduce carbon emissions.
Gas is a cleaner and more cost-effective fuel source as compared to crude oil, heavy fuel oil and diesel, and Ghana will utilise gas as a transition fuel to achieve low-carbon development. Ghana’s total installed power generation capacity is far in excess of its peak electricity demand, as such, the Government of Ghana has prohibited all new power generation projects including renewables, which will delay the immediate transition to solar and wind power.

How important is competition in the natural gas sector?
It is extremely important to have competition in any sector, and this is no different for Ghana’s natural gas sector. A lack of competition will encourage gas suppliers to neglect quality and customer service and offer unsatisfactory pricing to gas offtakers.
Ghana first received natural gas imports from Nigeria via the West African Gas Pipeline (WAGP) in 2009. Over the years, the WAGP has been described as “unreliable,” delivering natural gas to Ghana sporadically due to feedstock and infrastructure constraints in Nigeria, debts owed by Ghana to Nigeria Gas (N-Gas) for gas supplies and damage to the West African Gas Pipeline.
For several years, the WAGP was the sole source of gas for Ghana’s power generation requirements and intermittent gas supplies triggered nationwide power outages. Today, Ghana has access to indigenous gas from Tullow’s Jubilee and TEN fields, and Eni’s Sankofa field, which provide it with alternative sources of gas.
Once commissioned, the Tema LNG import terminal will also serve as an additional source of gas as Ghana’s power and industrial gas demand grows. This diversity of supply will spur economic development if harnessed efficiently and provide Ghana and West Africa with energy security for years to come.

What is the objective of the Tema LNG import terminal?
Tema LNG is sub-Saharan Africa’s first liquefied natural gas (LNG) import terminal. The LNG import terminal is an innovative combination of a purpose-built floating regasification unit twinned with a modified LNG carrier to receive, store and regasify LNG. The Tema LNG import terminal will provide Ghana and other West African nations with access to clean and reliable natural gas for power generation, ensuring availability of electricity for economic growth.
The terminal will bridge the gap between gas demand and supply in the Tema power and industrial enclave and beyond. By trucking LNG, industries, power generation companies and mine operators in Ghana and landlocked countries such as Burkina Faso will also have access to gas, spurring economic growth.
With the implementation of the African Continental Free Trade Area agreement, it is extremely important that Ghanaian businesses are sustainable and competitive. The Tema LNG regasification unit will hopefully reduce the cost of power in Ghana and as such, the costs of doing business, allowing companies the opportunity to grow and tap into the regional African market.

What opportunities does the Tema LNG project present for Harlequin Oil and Gas?
In December 2018, Tema LNG awarded Harlequin the engineering, procurement and construction contract (EPC) to construct the 6.5-kilometre onshore gas pipeline from the lee side breakwater causeway at Tema Port – where the floating regasification unit (FRU) is located – to the Volta River Authority interconnection facility in Tema, Ghana. Harlequin was also awarded a contract by Gasfin Development to install a newbuild natural gas heater skid package on the Tema LNG FRU at the Tema Shipyard.
Today, Harlequin is actively pursuing gas infrastructure projects and gas conversion projects for power stations and industrial customers, as gas becomes more accessible and a cleaner alternative fuel source for power generation and industrial development in sub-Saharan Africa. As the global energy transition advances, gas will play a critical role in Harlequin’s business restructuring.

Are domestic companies ready to own and operate midstream infrastructure?
Ghanaian companies that have the relevant track record and capacity are excited about the opportunity to own and operate midstream infrastructure; many 100% Ghanaian-owned companies already own and are successfully operating downstream infrastructure. Notwithstanding, it is important to note that the ability for Ghanaian businesses to own and operate midstream infrastructure would largely depend on the adoption and implementation of policies that support local equity participation.

Can the energy transition be a new driver for local content development?
Transitioning to gas and renewable energy will not only help the Government of Ghana achieve their sustainable energy goals but will also have several positive socioeconomic impacts on the economy.
The shift has the potential to increase local employment in the energy sector and stimulate new industries which require clean, affordable and reliable sources of energy to thrive. Developing and maintaining renewable projects such as solar and wind farms will require local education and training to ensure jobs are retained in Ghana’s energy sector, as the world transitions to net zero.
During the shift, the energy sector will introduce new technologies which will require new certifications and further development of the Ghanaian workforce. In the near future, for example, Harlequin’s welders and fabricators should easily be trained to manufacture suction installed foundations for offshore wind turbines, which are similar to the suction piles we manufacture for the upstream oil and gas industry; specifications of components may change, but the discipline remains the same. Harlequin will focus on continuous training and certification as the sector transitions in order to maintain and drive local content in the energy sector.

What kind of services could the company provide outside of Ghana?
Harlequin’s service offering includes turnkey welding and fabrication covering both topside and subsea requirements for the upstream oil and gas industry; EPC services for hydrocarbon pipelines and storage tanks; CNC machining and hydraulic services; electrical, control and instrumentation (EC&I) installation; and steel, mechanical, piping and plate work (SMPP) construction services for the oil and gas, power and mining industry.
Outside of Ghana, the most interesting opportunities for Harlequin currently would be the Stabroek block oilfield development in Guyana, the Tilenga and Kingfisher projects in Uganda, and the East Africa Crude Oil Pipeline Project from Uganda to Tanzania.
As a reputable contractor for the engineering, procurement and construction of hydrocarbon pipelines, SMPP, and subsea and topside structural and piping fabrication in Ghana, we would like the opportunity to extend our services to other countries in sub-Saharan Africa and beyond. We hope to achieve this by building the capacity of local companies in Guyana, Uganda and Tanzania through partnerships, training schools and on-the-job training.
We shall build the necessary infrastructure in the host countries and provide in-country services that assist State and international oil companies to exploit their resources safely and economically. We invest heavily in training at Harlequin and ensure that young professionals are endowed with skills beneficial to the oil and gas sector. As such, Harlequin would like to do the same across Africa to assist indigenes of the host countries gain self-sufficiency through local capacity building.
Guyana and East and West African nations are very much a part of our growth strategy going forward. We do not intend to set up shop in these countries to compete with local businesses, but rather to partner with locals by offering services that complement and support what’s already present in-country. We are strong advocates of inclusive growth in Africa and beyond.

How attractive is the petroleum hub project for a company like Harlequin Oil and Gas?
The Petroleum Hub Development Corporation aims to stimulate economic growth by cementing Ghana’s position as West Africa’s regional hub for the petroleum industry. The infrastructure to be constructed at the petroleum and petrochemical hub will include port terminal facilities, power plants, jetties, refineries, petrochemical plants, tank farm facilities and a network of pipelines.
Harlequin will continue to monitor the petroleum hub project and would be honoured to contribute to such a monumental project for Ghana and the continent at large, as a 100% Ghanaian owned business. Harlequin has the local expertise to execute a myriad of work scopes to be delivered under the project, including storage tanks and pipelines, and owns a world-class facility in close proximity to the project to support all field operations. We are hopeful that the private sector and the Government of Ghana will prioritise local content in the development of this multi-billion-dollar project.

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