ACEP predicts $72.5m loss from Tema LNG project
Energy Think Tank, Africa Centre for Energy Policy (ACEP), is anticipating a $72.5m loss in revenue from the Tema LNG project by government. The projection by ACEP is based on the approved budget for the GNPC by Parliament for this year.
According to ACEP, the Tema LNG infrastructure in its entirety is going to cost government $59.5m. In addition, government is expected to make purchases of LNG costing some $163m. The cumulative cost of the LNG facility and LNG purchases, ACEP further notes, amounts to a total of $222.5m. However, estimated revenue from the LNG project for the year 2022 is $149.95m.
The Executive Director of ACEP, Benjamine Boakye said, “This indicates that GNPC is even preparing to make a loss for the imports of LNG, even assuming that there is a need for the LNG which by the way is not the case,”. He made the assertions when delivering a presentation during a webinar themed, “Drivers of Ghana’s Debt and Implications on the Ghanaian Economy.” The webinar sought to indicate how inefficiencies and arrears particularly in the power sector, had contributed to the country’s present unsustainable debt status and the resulting economic crisis. Government, through the Tema LNG import terminal is anticipated import LNG for power generation so as to be able to meet the industry’s demand for electricity which have mostly relied on heavy fuel oils and diesel imports.
According to the African Development Bank (ADB) which is a financier of the Tema LNG project, current natural gas demand in the country is not being reliably met by local gas production or serviced by the West African Gas Pipeline, hence the Tema project will facilitate electricity grid expansion. With the arrival of a floating regasification unit (FRU) for the terminal, the terminal has the capacity to receive, re-gasify, store, and deliver around 1.7 million tonnes of LNG a year, about 30 per cent of Ghana’s general capacity.
“Tema LNG’s year-round supply of gas will enable the Ghana National Petroleum Corporation (GNPC) to supply reliable and cost-effective gas into the Tema power and industrial enclave, while strengthening West Africa’s energy security,” said Edmund Agyeman-Duah, the project manager of the terminal.