World-class facilitiesNovember 24, 2021
Meridian Group of Companies CEO Charles Addo, COO William Mould and CEO of the Energy Division Muhammad Zaman talk to The Energy Year about the critical role of gas infrastructure in Ghana and how the Group is meeting the growing demand for such projects. Meridian Logistics and Engineering provides oil and gas, engineering, procurement, construction, management and commissioning services.
What role will natural gas play in generating a sustainable energy transition in the African continent?
Charles ADDO: Although we are aware the world is in a global energy transition period, we are still very confident that the gas sector will grow exponentially in Africa. We are focusing on gas rather than oil as we believe that gas is the transitional product from oil prior to the transition to renewables and clean energy sources.
Muhammad ZAMAN: The First World is talking about the transition from fossil fuels to renewables, but there is little talk on the dire energy poverty in Africa. Many African countries do not have sufficient energy to support economic growth; there is hardly any energy to transition from!
Our focus is on developing the natural gas infrastructure for Africa because in Africa, we simply cannot move from fossil fuels directly to renewables. Right now, Ghana generates most of its electricity with its own natural gas. In this coming decade we want to focus on developing viable infrastructures for natural gas, LPG and LNG, which will also result in the reduction in Africa’s carbon emission footprint.
Will Ghana’s midstream infrastructure be able to cope with an increase in gas output from offshore fields?
CA: Ghana’s use of gas for power generation has gone up significantly since 2019, which means that there is a need to continue to pump gas through the pipelines to reach all of the country’s power stations. It is expected that Eni and Tullow will increase their respective gas production in the coming years. The government in anticipation of this expansion, about four years ago, launched a tender and we won an EPCC contract to build a mainline compressor station for the Ghana National Gas Company’s Atuabo Gas Processing Plant to boost the delivery of gas.
This station will help increase the throughput capacity of the gas coming from the Jubilee and TEN fields, which will now comingle with the gas coming from the Sankofa field, operated by Eni, at the same pressure level of 100 barg. We expect to commission the plant by the end of October 2021.
What are the technical characteristics of this mainline compressor station?
CA: The AMCS EPCC Project consists of the AMCS Block Valve Station (BVS) and Anokyi Mainline Compression Station (AMCS). The AMCS is located adjacent to the existing LPG loading gantry, at Anokyi, 2 kilometres east of the Atuabo Gas Processing Plant in the Western Region of Ghana.
In the Phase I Establishment Project of the AMCS development, we installed facilities such as reciprocating gas engine-driven compressors and related process units and utilities in order to accommodate a boost to 100 barg pressure for reinjection into the gas pipeline, enabling it to manage a throughput of 180 mcf [5.1 mcm] per day of low-pressure lean gas offtake.
Among other facilities, we also installed a process gas treatment area, gas compression area, vent stack, utility area, the overall plant pipe rack, an electrical generation and distribution area, tie-in works for the LPG gantry plus general facilities such as firefighting, underground piping, roads, fences, guard houses, etc.
As the country increases its gas-to-power generation, is there a demand to enhance gas distribution networks too?
CA: Yes, we are aware of a number of projects to enhance the distribution networks to our mines and industries, which require additional throughput of gas.
We are currently completing the FEED for the compressor station’s second phase, which will give it extra pumping capacity, a critical requirement for Train II of the Atuabo gas processing plant when it is built. This second phase, which we call the Third Compressor Project, will give Ghana Gas the ability to pump much more gas than is currently being pumped from the GPP to various power stations.
While the current station is designed to pump gas only eastwards, the Third Compressor Project will also enable Ghana Gas to pump gas westwards. This additional functionality will enable the government to build a power plant at the border to supply power to Ivory Coast.
What is Meridian Group’s expertise related to natural gas processing plants?
CA: For a number of years now we have built in-house capacity to install sophisticated energy plants. We now have the capability to build a gas processing plant; we just need the opportunity to demonstrate this ability. We are closely following Ghana Gas’ plans to build a second gas processing plant.
In 2015, our company helped Ghana Gas commission the Atuabo gas processing plant by building an onshore facility to receive mono-ethylene glycol (MEG), used to clean the subsea gas transportation pipeline and thus enable first gas to flow from the Jubilee field. We also built a standby compressor for the same plant, and have assisted with operations and maintenance work such as corrosion control and supply of chemical consumables.
Operations and maintenance is a service capacity that we can develop and build rapidly as our managers already have the necessary expertise and experience. We are already there; it’s just a question of getting the opportunity. We also participated in interconnection works for the TEN offshore gas pipeline.
I can proudly say that we are the only indigenous company that has the capability of undertaking complex oil and gas EPC works.
What capabilities can Meridian Group leverage to compete against larger turnkey service providers with a global reach?
CA: We think we can beat them at their game because we’re able to deliver world-class facilities at probably less than 20-30% of the cost to Ghana. Projects such as storage facilities and distribution networks are too small for multinationals and too big for companies smaller than us. We have the track record and the in-house capabilities for cost-effective and efficient delivery of EPC projects.
As an indigenous player, I’m proud to say that we are able to support our clients and control the whole project cycle, from the early stage basis of design, front-end engineering, detailed engineering and procurement right down to the construction, pre-commissioning and commissioning. In addition, we have the expertise to structure transactions to assist our clients in raising the capital required for their projects.
MZ: We have started with small-medium natural gas infrastructure projects. Multinationals cannot compete with us because their overhead is too large. For example, if ExxonMobil or Shell wants to take on a USD 100-million project here, mobilisation alone will cost them USD 10 million.
Keeping this in mind, we are preparing ourselves to export what we’ve done in Ghana to the whole continent. We’re not just service providers; our capabilities can create real change in Africa. We already have a footprint in six countries: Ghana, South Sudan, Uganda, Mauritius, Mozambique and South Africa.
We want to build natural gas infrastructure in partnership with local businesses in order to develop their capabilities to guarantee true local content.
Has the Covid-19 pandemic changed the way international companies think about local content?
William MOULD: When a crisis hits, like the Covid pandemic, indigenous companies cannot run away. Throughout the Covid period, we never shut down, we could depend on our local workers who had no other country to run to. We were therefore able to continue working with the adoption of very strong Covid prevention policies to keep our people safe. 90% of our head office staff now work from home, all our office meetings are held outside in the office garden where we have established outdoor working facilities. We only hope that the international companies have learnt the advantages of indigenising their operation through this pandemic.
Given the fact that we are an indigenous company that has clearly demonstrated that we can develop world-class facilities at a cheaper price than our international competition, it is our hope that this puts us in an advantageous position for upcoming infrastructure project developments in Ghana. We are indeed fortunate that the government is supportive of the need to increase local content in all infrastructure projects going forward to ensure that the spend on these projects stays in Ghana.
MZ: Our vision is to develop real local content, and to provide a turnkey solution to energy poverty in Africa. We have undertaken our own local content initiatives, where we executed projects with our in-house capabilities, starting from pre-feasibility, feasibility and FEED design, then detail engineering, procurement, construction and commissioning.
It will take some time to build the confidence of the operators. In future, we are looking to develop build-operate-transfer projects in the domain of natural gas infrastructure.
In which other activities is the Group involved?
WM: The Group has an infrastructure development company called Bluestone Infrastructure Company; we’re building 10 fishing harbours along the coast of Ghana, in partnership with a Chinese company called China Harbour.
We have a Group affiliate called Eco Natural Resources that is in a JV partnership with Champion X, supplying speciality production chemicals to Tullow for the TEN and Jubilee fields.
We are also operating inside the Tema port, where we have been providing a shunting operation for Meridian Port Services at their container terminals for over a decade now.
We have a stake in a fintech company called Onango, which is expanding rapidly throughout Africa. We have a stake in a fund management startup called Oya Capital. We also have an interest in a commodity trading company called Harvest International.