Inferior plant for Ghana’s gas?
Experts in the gas processing industry are beginning to raise questions on whether Ghana will be getting value for money if it were to go ahead with the type of processing plant being constructed by Sinopec International Petroleum Corporation, the Chinese firm constructing the plant for the Ghana Gas Company.
Documents sighted by The Chronicle indicate that the Chinese are constructing a plant with a 46% liquid recovery rate, rather than one which has a recovery rate of 85%, which could yield an additional 30,000 barrels of gas per day, amounting to over $100 million a year.
Interestingly, the 46% recovery plant is being procured at a cost higher than the 85% recovery plant.
Information gathered by The Chronicle indicates that the only excuse used to get Ghana to accept the low performing plant against the high quality plant is that it would need an additional 40 days to be completed.
But, sources close to the project have questioned the credibility of this claim. They argue that in any case, there are other areas such as land acquisition that is facing a delay beyond three months period.
They have also mentioned the fact that shallow water pipelines, which were expected to be delivered in July this year, have since not yet arrived at the port, and that the meeting of deadlines should not have been a tangible reason why Ghana should opt for an “inferior plant.”
Industry experts are also raising the red flag about over pricing of the onshore pipelines for the project, which cost a whopping $45 million.
The Chronicle also found out that the procurement of the pipes was subcontracted to SAF Petroleum Investment (FZE) , a company believed to have been set up by the contracting entity -Sinopec – which in turn ordered the plant from Thermo Design Engineering Service at a cost of $193 million.
Issues about the standards for these pipes are said to have sparked exchanges between the regulator and the Ghana Gas Company, with the regulator insisting that approved standards were followed as required by the engineering specification.
According to industry experts, the uncoated pipes could lead to about a 10 per cent reduction in the gas delivery process.
Other sources close to the project, who spoke to The Chronicle, indicate that Ghana might not necessarily be shortchanged by the plant being constructed by the Chinese. They explained that the quality of gas to be produced by the plant could have a higher market value what the 85% recovery plant could produce.
They gave the assurance that despite the fact that the project might be facing a few challenges, the authority involved would ensure that the right things are done, and Ghana emerges the beneficiary party.
These issues are said to have reached the attention of President John Dramani Mahama, who has directed the Ministry of Energy and the other relevant stakeholders to ensure that Ghana gets value for money in the processing of Ghana’s gas component of its oil find.
The Chronicle is reliably informed that the Ministry of Energy, the Petroleum Commission and the Ghana Gas Company, upon the instructions of the President, held an emergency meeting yesterday to discuss the issue.
Ghana’s gas reserves are estimated at 5trn cu ft, which offers significant potential to feed the country’s industries, as well for domestic use.
Ghana’s Parliament had already approved an $850 million loan from the China Development Bank (CDB) for the gas project.
The $850 million loan forms part of the $3 billion agreement between the government and the Chinese Development Bank to finance a variety of infrastructural development projects.
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