Growth in Ghana’s port servicesJanuary 6, 2022
Michael Achagwe Luguje, director-general of Ghana Ports and Harbours Authority, talks to The Energy Year about expansion projects at the ports of Tema and Takoradi and the expected recovery of activity in Ghana’s oil and gas industry. Ghana Ports and Harbours Authority oversees the country’s maritime gateways.
What are the latest developments on the Port of Tema expansion?
When the Meridian Port Services (MPS) Terminal 3 project was opened for business in July 2019, the key focus was to position the Port of Tema as the container trans-shipment hub for West Africa. To do so we needed a bigger terminal to receive container vessels of up to 18,000 teu with water depths of 16 metres.
Since we began, we have seen a significant improvement in cargo growth for trans-shipment. Despite the pandemic, we projected throughput of around 1 million containers in 2020 but managed 1.2 million. We have seen a 406.6% growth in container trans-shipments alone, well above our 6% container growth estimate. This shows the tremendous impact the expansion has had on container presence in the Port of Tema.
Our container terminal today is one of the largest in the sub-region and we should see further competitive volume growth by the end of 2021.
We are also in the second phase of upgrading the dry bulk jetty. We need to dredge and equip it with conveyor systems to handle raw materials and other types of related cargo.
What work is being done to position the Port of Takoradi as a regional hydrocarbons logistics hub?
The Port of Takoradi is currently servicing the oil and gas services industry, albeit with a less modern facility while we prepare to develop more state-of-the-art infrastructure. The oil terminal expansion and pending hub project are being done to ensure that all necessary supplies to service oil platforms are available and logistically concentrated in one accessible place. We are currently in negotiations with an investor interested in signing a concession for the oil and gas hub. Once negotiations are completed, we should be able to start construction, which should take between 18 and 24 months.
Additionally, we have completed the new liquid bulk terminal. The new 300-metre-long, 14-metre-draught oil jetty was fully completed and operational as of mid-year 2021. It is a vast improvement from the original, which was 120 metres in length and 8.6 metres in draught.
The new Takoradi Liquid Bulk Terminal will help in the cost-efficient handling of petroleum products for suppliers. It is a state-of-the-art facility fitted with automated loading arms capable of handling various types of petroleum products including LPG, bitumen, etc.
We have concessioned Prime Meridian Docks to build a floating ship and rig repair facility in the Port of Takoradi to ensure all oil rigs operating in the region can have repairs and dry docking. We expect them to begin in Q1 2022. They are currently conducting various air and water studies in preparation. The objective is to ensure that supply vessels working in the oil and gas industry in Ghana and in the sub-region, which hitherto were going to the docks in Las Palmas and Cape Town will not have to travel so far but will do their maintenance works cost effectively right within the sub-region.
While Takoradi will be Ghana’s oil and gas services hub, we also want to position Takoradi as an alternative for other types of shipments to and from Ghana; we do not want to limit these to Tema alone.
Thus, there are ongoing expansion plans for the dry bulk terminal as well as other expansion activities, such as the completion of the first phase of the Takoradi Container Multipurpose Terminal, which is big enough and has deep enough waters to be able to augment container handling facilities in Ghana and the sub-region. Construction is still ongoing to fully complete the remaining phases of the container multipurpose terminal.
How did the downturn of the oil sector affect activities at Ghana’s ports?
In 2020, Takoradi suffered significantly. Cargo volumes dropped by about 28% and revenues from oil and gas services dropped by about 40-45%. Fortunately, towards Q4 2020, we saw a minor recovery. In our interactions with operators, they are quite positive about the future.
A number of companies that cancelled contracts are indicating they want to return and renew contracts. This is a good sign for those of us providing logistics. Our planned investments should continue because the sector is set to rebound positively. We will hopefully grow back to normal levels of activity.
We are well positioned to support the oil and gas industry with port infrastructure and logistics. We are far advanced in our process to develop a modern oil and gas services hub that can accommodate oil and gas service operators. This makes us more competitive in attracting investments in the upstream that require adequate port infrastructure to support their business.
How will the African Continental Free Trade Agreement (AfCFTA) impact the region?
Ghana is already more or less a hub that supplies Burkina Faso, Mali and Niger. We have recently had interest from a Nigerian firm that has indicated that it has signed contracts with the Burkina Faso government to supply gas from Nigeria through Tema Port.
There are many prospects that will thrive with the success of the AfCFTA. Thus, when they put all measures in place, it will open the markets and give Ghana better opportunities to serve the continent as well as to receive other goods and services that the continent can supply.