Ghana LNG Import Terminal Nearing Finish Line—and None Too Soon

By Julianne Geiger - Feb 20, 2024

Ghana’s much-delayed natural gas import terminal is nearing the finish line and is expected to be complete by the end of this year, the country’s oil regulator said on Tuesday.

The LNG pipeline and storage network and import terminal, owned by Tema LNG Terminal Co., is already years behind. Ghana’s National Petroleum Authority CEO Mustapha Abdul-Hamid said on the sidelines of an energy conference in Cairo that Ghana had signed a gas supply agreement with Equatorial Guinea LNG, majority-owned by Marathon Oil Corp, Sonagas, and Marubeni.

Ghana has transitioned itself into one of the fastest-growing producers of hydrocarbons in Africa. In 2022, Ghana was suffering from its worst economic crisis of this generation, plagued by runaway inflation, a depreciating currency, sky-high energy tariffs, and a long list of previously unfavorable hydrocarbons contracts. The Ghana economy is now “showing signs of stabilization” due to an IMF-supported economic program.

But LNG imports will help the nation secure its own energy security as it plans on doubling its domestic electricity demand from 2022 to 2030.

Currently, all of Ghana’s natural gas imports come from Nigeria—Africa’s largest holder of proven gas reserves—via the West African Gas Pipeline (WAGP), but those imports have been unsurprisingly unreliable, both because Nigeria has in the past been an unreliable supplier and because Ghana has had trouble in the past meeting its repayment obligations.

Ghana’s energy source mix as of 2022 is 33.6% oil, 28.2% natural gas, 32.4% biomass, and 5.7% hydro. But as recently as in October, a natural gas shortage in the country triggered a complete power outage, highlighting its electrical deficit. Although Ghana routinely experiences blackouts, this was the most egregious one in years. 

By Julianne Geiger for Oilprice.com