Leveraging Ghana’s gas potential

Ghana

Ben Asante, CEO of the Ghana National Gas Company, talks to The Energy Year about how Ghana can leverage its natural gas potential to drive economic development

This interview is featured in The Energy Ghana 2022.

What are the latest developments in Africa’s gas monetisation trends?
Using natural gas as the fuel for industrial expansion is going to be the pillar of growth for socioeconomic development in the whole African continent. We need to meet the expectations of gas as a transition fuel moving towards carbon neutrality in line with the global energy portfolio.
Gas is the fuel of choice as the bridge from fossil fuels to renewables because of the low cost and low carbon footprint that it presents.
Using gas for power generation instead of liquid fuel – mostly light crude oil – could save the country about USD 500 million a year. From an environmental perspective, this would cut carbon emissions by about one-sixth, while still generating the same amount of power.
However, we see gas as more than just a transition fuel. Once you produce gas from the reservoir, you have three options: flare it, reinject it into the reservoir or monetise it. Monetisation is what we are focused on – using the gas either as an energy source, as a feedstock or as a fuel for vehicles, which is really gaining momentum in the world.

How can Ghana leverage its natural gas potential to drive economic development?
In Ghana, 90% of our gas supply is currently used for the generation of power. The rest is used for heating in industries such as plastics and ceramics. We want to look at gas for CHP: combined heat and power in industries that require both, such as the mineral processing, pulp, paper and cement industries.
Currently, LPG is used for heat in domestic applications but in the future, we may be able to use the gaseous form like other countries do. As feedstock, gas would be the primary component for industries such as methanol, ammonia and urea.
Along with the Ministry of Railways Development, we are looking to use CNG to power our trains. Most importantly, this is a local fuel. Diesel has to be imported using foreign exchange. Using CNG in trains would save us 60% on the operating costs.

What is the biggest challenge African nations face while trying to monetise their natural gas potential?
The infrastructure is critical. It is mostly gathering, processing, transmission and on the tail end, distribution. Even though Africa is energy self-sufficient in oil and gas, accounting for about 8-10% of the world’s resources, we only use about 3%. This is because of a lack of infrastructure, which results in most of our resources being exported. If we are able to put in the requisite infrastructure, we will be able to use our own natural resources for development.

What are the main challenges holding back the development of key gas-related infrastructure?
I think it’s a combination of inadequate access to expertise and finance. The issues that confront First World countries are the same as here in Africa. If you want to install gas infrastructure, there are issues of payment and land acquisition, expertise in EPC and financing. But in developed countries, payment and land acquisition are more critical, while financing and expertise in EPC are not an issue. In Africa, payment and land acquisition are not a problem, but expertise and finance are the critical components that are often missing.
In Africa, the gas industry is in its formative stage. Countries like Nigeria and Equatorial Guinea have had these resources for a long time, but for the continent as a whole it’s still a growing phenomenon. In Ghana, we are trying to build capacity to address the issue of engineering and construction expertise. We also need to present a case to investors by emphasising our appealing fiscal regime and abundant available land.

How is Ghana Gas working to enhance the country’s gas processing capacity?
Currently, we are looking at constructing a second gas processing plant – a second train just north of the existing Atuabo plant. The initial capacity will be 150 mcf [4.25 mcm] per day but will increase to 300 mcf [8.5 mcm]. The cost could run anywhere from USD 300 million-400 million. It will be developed on what I would call a BCCT basis, where we will build, co-own with equity participation, co-operate and then transfer. Ghana Gas reserves the right to take some equity participation, ensuring that we have active participation in the infrastructure, the ownership and the operation.
The development is planned in Phase II-A and Phase II-B, and it will be driven by Tullow’s estimated reserves and production capacity. If in the future Springfield, Eni or even Aker come through with new gas, we would install more trains to handle that additional feed.
We’re looking at an installation and service date of about 2024 for the second train. We’ve recently finished the FEED. We’ve also had engagements with the communities, so they understand that we’re coming to install an even bigger processing plant. We are currently looking at financing, and we have quite a few suitors who want to be a partner in the installation of this plant.

What will the main technical differences between Train 1 and Train 2 be?
In the extraction of natural gas liquids there are two main levers: a Joule-Thomson valve, which will extract about 40-45% of the liquids in the raw gas stream valve, and a turboexpander, which ensures about 80-90% liquid extraction.
But that is just the measure of your extraction efficiency. If your goal is to have more gas for power generation, you should stick with the J-T valve because it will extract less, and you’ll have more of the gas left for both power generation and non-power applications. On the other hand, the expander will extract most of the liquids, so you have less of the gas left. It all depends on what the commercial focus is.
Since we already have a J-T valve, our next move is to use a turboexpander to be able to extract more of the liquids, so this is what we will install in Train 2. Most of the NGLs that we produce currently and will produce in the future are LPG, pentanes and condensates.

What is the strategy in place to further increase natural gas penetration in the country?
Aside from the new plant to ensure we are able to process more gas, in the next two to four years we are looking into new gas transmission infrastructure that will allow us to access more markets inland and in neighbouring countries.
In terms of location, most of the gas is being used for power generation and most of the power generation facilities are along the coast. We want to go inland to provide some reliability. There may be a multiplicity of sources, so we need gathering lines to bring the gas to a common point for processing. Even with our modest resources in gas, pipelines linking the sources to the market are key. Alongside that, we need compression stations that enable us to move the gas over long distances.
Building infrastructure inland will allow us to serve power generation assets in the country’s north, as well as create access to our landlocked neighbours, such as Burkina Faso and Mali.

Where do you see more opportunities for private companies to participate in these upcoming developments?
We see opportunities for private companies along the entire gas value chain. On the upstream side, there is exploration and production. In the midstream there is the gathering, transmission and processing infrastructure. There are also distribution networks as well, which would require private-sector participation, opening new opportunities. The whole slate of gas utilisation, including the petrochemical and agrochemical sectors, presents a new set of opportunities for investors who want to come to Ghana.
As a country, we are very excited about the opportunities that are presented along the entire value chain. We will be looking at investors who think of this as an exciting opportunity to partner with the country and with Ghana Gas.

How can the overlapping functions of GNPC and Ghana Gas as gas offtakers be rationalised in the future?
The issue is being addressed. In terms of functional roles, there are producers, aggregators, shippers or transporters, operators and end users. Normally, the aggregators, shippers and operators are bundled, particularly in this infant stage of our industry. We intend to harmonise or bundle some of those roles.
As the gas industry grows over the next 10-15 years, we can choose to unbundle those because as an aggregator they will be getting gas from a multiplicity of gas sources to hand it off to a shipper who will buy capacity. At this stage, it makes sense for the roles of aggregator, shipper and operator to be vested in one company. There are many models like that around the world.

Are Ghanaians prepared to manage large-scale gas infrastructure assets?
When I was brought in as a consultant to help with the installation and initial operation, I felt that there was an opportunity to build up local capacity, as our workforce had been around through installation, and they have good backgrounds in engineering and operations in other sectors. It didn’t happen overnight, but we gradually phased them in.
Since 2017, our plant has been fully run by young Ghanaian men and women who are engineers and technicians. In comparison, if you look at Nigeria or Trinidad and Tobago, it took them 40 years to fully indigenise the operation. In Ghana, we were able to do this in three to four years.
In the last four years of operating this plant, there has not been any lost time to injury or death. Our safety records have been stellar. It is another case of indigenous African professionals who can run something as complicated as a gas processing plant. We have a lot of people who come to visit our plant because of that, and we hope to replicate it in other sectors.
A lot of credit goes to the young men and women at the site who stayed the course from the construction period through operation. That was novel. You often hear it said that some people can become successful with hard work, while some can with knowledge and intellectual capacity. The men and women at the Atuabo plant have both: they work hard and are very smart. We are blessed to have them leading the charge.

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