The country lost 47 billion cubic feet (bcf) of gas to flaring between 2019 and 2021, the African Center for Energy Policy (ACEP) has revealed.
The energy policy think tank said the flared gas was valued at $300 million and amounted to money that was wasted due to limited investment in the gas sub-sector.
In a report titled “The State of Ghana’s Energy and Extractive Sectors: Critical Reforms Needed for Sustainable Economic Recovery,” ACEP said the gas was flared at a time when domestic consumption of processed gas, known as liquefied petroleum gas (LPG), has grown exponentially, leading to increased imports.
Therefore, he noted that there is an urgent need to increase investment in the gas sub-sector to increase domestic gas supply, reduce imports and increase the value that the economy derives from this resource.
Purpose of the report
The report, which was released last month, examined the state of the energy and extractive sectors, the performance of the respective state-owned enterprises (SoEs) and offered solutions on how to maximize the national interests of the two industries.
He also reviewed the state of the two sectors following the COVID-19 pandemic and suggested ways to accelerate recovery.
ACEP said recent geopolitical issues and their impact on global commodity prices have highlighted the need for Ghana to focus on developing its domestic gas assets, which required investment.
He said the decision to import gas had implications on the amount of investment Ghana could attract for domestic production and the country’s ability to optimize existing infrastructure, which was contrary to the sources’ reported capacity. national by the operators – Tullow Ghana and Eni.
Citing Tullow Ghana’s 2021 annual report, the energy think tank said the company said its investment in gas processing infrastructure on the floating vessel, production, storage and offloading (FPSO ) Jubilee and the ability to supply Jubilee & TEN gas gave it confidence that it could meet growing domestic demand and be the most competitive gas supplier in the Ghanaian market.
“However, this requires investment in upstream gas production and gas processing infrastructure along the way. Therefore, if the level of risk is high, the investments will have a higher premium or not,” ACEP said in the report.
“The government’s plan to expand the existing Gas Processing Plant (GPP) has been on the drawing board for many years. The expansion plan was to receive additional gas from the Jubilee/TEN fields and other discoveries.
He said that “instead, gas that could have been used for power generation and other industrial uses is either flared or re-injected because existing GPP capacity cannot handle the additional gas from fields”.
Regarding the volume of gas flared, ACEP said the data indicated that approximately 246 billion cubic feet of gas was either flared or re-injected between 2019 and 2021.
“Of this quantity, approximately 46.8 bcf were burned while 199.8 bcf were reinjected. Gas flared from the Jubilee and TEN fields could represent a daily supply of approximately 50 million standard cubic feet per day (mmscfd) if the GPP were expanded as planned.
“Furthermore, the cumulative volume of re-injected and flared gas could provide an additional volume of over 100mmscfd from the Jubilee and TEN fields, enough to meet Ghana’s medium-term gas needs.”
“Again, gas delivered from the expanded GPP to power plants and non-power users could be another revenue-generating source for the upstream gas sector. The total volume burned of 47 billion cubic feet represents a gross shortfall of approximately $300 million in addition to the co-benefits noted above,” CAPE said.
The report said the Sankofa Gye Nyame (SGN) field delivered approximately 210 mmscfd of gas, well above the take-or-pay commitment of 159 mmscfd. The existing field infrastructure also had an estimated capacity of approximately 260 mmscfd without additional investment, providing an additional 50 mmscfd of SGN.
“Again, other discoveries in the region, such as the Akoma and Afina discoveries, require investment for appraisal and possible connection to the JA Kufuor FPSO.
“Current upstream developments in the country have the potential to meet Ghana’s gas demand. Therefore, the government should focus on optimizing these resources rather than imports,” he said.
“The optimization of national sources offers a wide range of tax and non-tax advantages to the State. These include job creation, local content development, technology development and increased government revenue from corporate taxes, pay as you earn (PAYE), service tax, among others,” he added.