Tullow continues Ghana GSA talks
Tullow Oil is continuing discussions in Ghana to strike a new gas sales agreement for its flagship Jubilee and TEN oil projects, leveraging mainly non-associated gas reserves that came to light earlier this year, Ghanaian media outlet Joy Online reported September 13.
London-listed Tullow had said July 13 the two clusters could offer a resource potential approaching 2 trillion ft3, made up of associated and non-associated gas. Both oilfields sit around 45-60 km from Ghana's coast, within reaching distance of the Cote d'Ivoire's maritime border.
Ghana has an initial deal in place to extract accessible gas volumes from the Jubilee/TEN clusters, amounting to of 200bn ft3 of so-called "foundational" gas reserves.
By December-end these quantities will be exhausted, meaning a new deal will be necessary to tap deeper non-associated reservoirs that Tullow has informed it intends to develop.
Tullow said the biggest gas potential lay in a single non-associated gas deposit spread beneath both Jubilee and TEN's offshore licence areas. If the development is sanctioned for investment, Tullow anticipates it will be sufficient to yield 200mn ft3/d of gas.
Ghana's gas price is currently averaging at $6.50/mmBTU, according to Wissam Al-Monthiry, managing director of Tullow's Ghana unit, which is on trend with historical gas price estimates for this market. Tullow has said previously Ghana needs more gas supply to reduce exposure to soaring spot prices for LNG cargoes.
As of 2014 the country was believed to contain around 17 trillion ft3 of prospective gas potential, according to the USGS, the same as neighbouring Cote d'Ivoire. Natural gas pricing is more closely related to domestic markets than for oil, mainly due to higher difficulty of transporting gas - for instance LNG rather than crude shipments - which remains the case for large parts of Africa, despite moves to encourage intra-African gas trading.
Oxford Institute for Energy Studies said in 2019 that $6-$8/MMbtu was a "reasonable tariff" for high income sub-Saharan markets, while the World Bank in 2014 pegged the price of Nigerian gas imports into Ghana - via the West African Gas Pipeline, which runs from Benin and Togo, - at around $7-10/MMbtu.
That compares with $9-11/MMbtu forecast for a hypothetical extension of the pipe into Cote d'Ivoire back in 2014. Ghana's gas demand is expected to reach 3bn m3/yr at the end of decade, soaring from just 1.2bn m3/yr four years ago