Government and Tullow to finalize a gas supply agreement worth 200 million cubic feet daily
Tullow Ghana, a leading oil and gas company, seeks to secure a commercial gas deal with the government, aiming to supply a minimum of 200 million cubic feet per day (MMcf/d) for the next 13 years from its Jubilee and TEN fields.
The company has been providing free gas to the government since it began operations in Ghana, with the current 200 billion standard cubic feet (bcf) forecast to expire at year's end. As these foundation volumes are set to deplete, Tullow Ghana is eager to monetize its gas reserves, estimated at around two trillion cubic feet (tcf).
Tullow's Managing Director, Wissam Al Monthiry, expressed aspirations to utilize these gas resources for the nation's benefit, whether in the power or manufacturing sectors. Discussions with the government are ongoing, with a proposed deal aiming to provide gas at a competitive rate compared to other options available to the country.
The agreement would stimulate new capital investment in facilities and pipelines, as well as solidify the government's commitment to harnessing domestic resources for economic development. Significant investments will be needed for the necessary approvals, drilling wells, and construction of facilities to bring the gas to market.
Gas is essential to Ghana's industrial growth, with thermal power plants - mainly gas-powered - accounting for 66% of the country's power generation. However, a considerable portion of the country's thermal demands are met through imports.
The ability to develop domestic gas resources could propel Ghana into a period of sustained energy security and industrialization. If fully exploited, Ghana could even potentially become a net gas exporter amid the European Union's energy crisis.
Given the urgency of the situation, Tullow Ghana aims to finalize the deal before the end of 2022. The company emphasized the importance of reaching an agreement to avoid leaving a significant amount of gas uncontracted, which could result in higher gas costs for the country.
Discussions involve multiple parties, including the Ministry of Energy, Ghana National Petroleum Company, Ghana National Gas Company, and private companies. Wissam Al Monthiry encourages all stakeholders to expedite discussions to ensure a deal is reached and affordable gas continues to benefit the nation. If unsuccessful, this could prevent the government and Ghanaian gas consumers from accessing the lowest-cost gas available, which could deter future investors from exploring opportunities in Ghana's petroleum upstream industry.
- Tullow Ghana aims to finalize a commercial gas deal with the government, seeking to supply a minimum of 200 MMcf/d for the next 13 years from its Jubilee and TEN fields.
- The proposed deal aims to provide gas at a competitive rate compared to other options available to the country, which could stimulate new capital investment in facilities and pipelines.
- Discussions are ongoing with the Ministry of Energy, Ghana National Petroleum Company, Ghana National Gas Company, and private companies, with the goal of solidifying the government's commitment to harnessing domestic resources for economic development.
- A significant portion of Ghana's thermal demands are met through imports, but the ability to develop domestic gas resources could lead to sustained energy security and industrialization, potentially even making Ghana a net gas exporter amid the European Union's energy crisis.
- Wissam Al Monthiry encourages all stakeholders to expedite discussions, emphasizing the importance of reaching an agreement to avoid leaving a significant amount of gas uncontracted, which could result in higher gas costs for the country and deter future investors from exploring opportunities in Ghana's petroleum upstream industry.
