Ghana Eyes EquatoGuinean LNG

Ghana’s president Nana Akufo-Addo, who started on a three-day visit to Equatorial Guinea on August 21, plans to sign a five-year agreement to import LNG from that country with his counterpart Teodoro Obiang Nguema, according to a Ghanaian presidency statement issued August 21.

"The execution of this agreement is intended to augment domestic supply over the period, and improve further the power situation in the country, both for local consumers and industry," the statement said. 

Despite being a gas producer for about seven years, Ghana’s appetite for gas keeps growing in line with its demand for power generation. The country wants to boost gas supply to its power stations in order to become a major exporter of electricity in the region - an ambitious goal given that, as yet, none of its three main LNG import projects pending (Sahara-NNPC, Skaugen, Quantum) seems to meet the government's expectations.

Equatorial Guinea is currently developing its first deepwater floating LNG project, expected to deliver 2.2mn metric tons/yr. This week its main developer Ophir signed an off-take agreement with Gunvor for all this volume linked to the price of Brent crude, while allowing half of it to be sold to other markets if the price is higher, the proceeds being split between the Fortuna partners and the government.

There's an expectation in West Africa that the other half might be sold to other African nations and dynamic Asian economies, despite the norm that commercial LNG contracts are always between companies, and despite Ghana's difficulties in paying for commercial gas deliveries.

It should be recalled that the announced agreement comes two months after the respective power ministers of Ghana and Equatorial Guinea signed a memorandum of understanding for gas supply between the two nations. Ghana's energy minister and its state petroleum company GNPC are also present on Akufo-Addo's visit to the Equatoguinean capital Malabo.

Olivier de Souza