China Harbour Engineering has signed an agreement with Tema LNG Terminal Company Ltd., an entity controlled by Helios Investments, the world’s largest Africa-focused private equity fund, to construct a Liquefied Natural Gas (LNG) in Tema, Ghana.
The LNG Terminal, which will be completed in 18 months, will be Sub-Saharan Africa’s first regasification terminal, strengthening Ghana’s position as a regional trade and energy hub.
The LNG Terminal is being constructed on the back of a 12-year gas supply agreement that was executed between the Ghana National Petroleum Corporation (GNPC) and Rosneft, a global LNG trader and the world’s largest listed oil producer. Rosneft subsequently engaged Tema LNG Terminal Company for the provision of the regasification services.
The deal which was signed on Sunday, September 2 during President Nana Akufo-Addo’s state visit to China, is estimated to generate some 1,600 jobs and provide about two million tonnes of liquefied natural gas every year.
This would mean that the facility would supply about 30% of Ghana’s total electricity generating capacity, displacing crude oil and crude derivatives as fuel sources for the generation of power.
In addition, a concession agreement signed between the Ghana Ports and Harbours Authority (GPHA) and Tema LNG Terminal Company Ltd, to allow for the siting and operation of the facility within the Tema port, will deliver an annual revenue in excess of $6 million to GPHA throughout the total concession period.
Witnessing the signing of the agreement, in Beijing, China, President Akufo-Addo indicated that the Tema LNG Terminal Project is a testament to the efforts his government has put in place over the last 19 months to encourage private sector participation in the growth of the economy.
The President noted that the construction of the terminal is in line with the commitment of his government to providing Ghana with constant, reliable and affordable power supply.
He stressed that “if we are going to succeed in pushing the industrial development of our country rapidly, the supply of gas, which will mean even more affordable rates of power, to our country is now a matter of very great importance for us.”
The Tema LNG Terminal Project is a private sector funded and driven project, led by established international sponsors, such as Rosneft, the world’s largest listed producer of crude oil, and Helios Investments, the world’s largest Africa-focused private equity fund. As such, there was no requirement for capital from Government.
The cost of the project is estimated in excess of some $350 million, of which $200m would be spent directly in Ghana over the next 18 months