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    Ghana Inks LNG Deal with Gazprom

Summary

It sounds like deliveries will start only in 2019, one or two years after Gazprom's offtake begins from the nearby Cameroon FLNG venture.

by: Olivier de Souza

Posted in:

Natural Gas & LNG News, Africa, Europe, Political, Ministries, Supply/Demand, Infrastructure, Liquefied Natural Gas (LNG), Cameroon, Ghana, Russia

Ghana Inks LNG Deal with Gazprom

Ghana has signed an LNG import deal with Russia’s Gazprom.

Signed last week, but first announced September 18, the agreement was inked by the Russian gas giant, Ghana’s energy ministry, and state-owned Ghana National Petroleum Corporation (GNPC). It fits into the government’s strategy to make the country a major regional gas-fired power hub.

Gazprom Global LNG (part of London-based Gazprom M&T) confirmed September 18 it had signed a gas sales agreement with GNPC whereby both will cooperate for 12 years starting 2019.  ‚Äč

Under the terms of the agreement, Gazprom will supply GNPC with 1.7mn metric tons per year, although Ghana said it has the possibility to reduce the volume by up to 10%. Local authorities say either volume of gas is enough to generate more than 1,000MW of electricity so should help alleviate power shortages experienced in Ghana for several years now.  

According to Citi News, the LNG will primarily come from the Cameroon floating LNG venture, due to start up shortly, where Gazprom is exclusive offtaker, with a regasification unit in Ghana to be installed offshore Tema, by Gazprom. That however was not mentioned in Gazprom's statement.

The 2019 start date cited by Gazprom suggests its deliveries will start one to two years after its offtake begins from nearby Cameroon FLNG.

Ghanaian sources indicate the LNG will be “low cost” which they say, in part, is due to the proximity of Cameroon to Ghana, with shipping accounting for up to 15-20% of the total LNG gas price.

Though the deal has been officially sealed by the two parties, Gazprom officials remained in Ghana to discuss details with the relevant government authorities.

In Ghana, much of the devil is always in the detail, with one floating LNG regasification unit (Golar Tundra) idle for 16 months now offshore Ghana, another such unit due for delivery in mid/late 2018, and a much smaller-scale LNG import and regas scheme that was due to have launched this summer but deferred. Gazprom M&T CEO Vitaly Vasiliev however said: “We are really excited about this collaboration as it sees GM&T entering a new market, located in a rapidly developing part of the world.”

 

Olivier de Souza