PROJECT 1: GAS COMMERCIALIZATION PROJECTS
INTRODUCTION
The Jubilee Field Oil is of light quality and has high gas content. For every 1,000 barrels of oil that is produced, there is an associated gas of about one million standard cubic of gas. Government is therefore embarking on a zero-gas flaring policy in order to fully utilize the associated gas of the Jubilee fields and any other future fields any other future fields. The anticipated as a primary energy for power generation, feedstock for petrochemical industry, and as a source of energy in the industrial sector
PROJECT OBJECTIVE
The general objective of the project is to develop a regional hub for the development of petrochemical industry in Ghana. Specifically, the project aims at harnessing the associated gas from the Jubilee Field to supply cheap gas for power generation, industrial application and for domestic uses. The gas infrastructure of the project will also facilitate the exploitation of the stranded gas in the North and South Tano fields and any future gas fields.
Strategic Plan
The project would be executed along the following strategic path:
- To bring the associated gas from the Jubilee Field and other fields to shore;
- To process the wet gas into dry gas and liquids including LPG, Condensate, and Propane;
- To supply the gas for electricity generation and for other industrial applications;
- To supply LPG for domestic use;
- To exploit the other liquids such as propane, butane, and condensate.
Possible Investment Area(S)
Currently, the Ghana National Gas Company with the support of a Chinese Development Bank loan is undertaking the gas processing infrastructural activities. Investor could invest into ancillary projects such as power plants and other secondary use of the processed gas aimed at ensuring the country becomes a petrochemical and power hub in sub-Saharan Africa. Aside from the financial benefits, the investor stands a chance of enjoying the conducive working environment in the country, and as a point of breakthrough to engaging into other interests in neighbourhood countries.
PROJECT 2 : HYDROCARBON EXPLORATION & DEVELOPMENT
INTRODUCTION
The Jubliee Field Discovery and the number of discoveries thereafter make Ghana an emerging petroleum producing countries. These discoveries have de-risked exploration activities in countries in sedimentary basins. Nevertheless, Ghana’s hydrocarbon potential has not been fully exploited. The government has put in place favourable fiscal and regulatory regime for the exploitation of the country’s hydrocarbon resources. The government is therefore reaching out to oil companies and other investors to explore and develop the country’s hydrocarbon resources.
Project Objectives
The objective of the project is to effectively and judiciously exploit Ghana’s untapped hydrocarbon resources. This is aimed at ensuring the country increases it reserve base to enhance its status as a net exporter of oil.
Strategic Plan
The country continues to promote its sedimentary basins under a favourable fiscal and flexible licensing policy to attract competent investors into exploring its sedimentary basins. The largest basin, the unexplored inland Voltaian Basin is targeted for some slim hole drillings to enhance database and promotion of the basin. The National Oil Company (Ghana National Petroleum Corporation) has also been strategized to put it in a position to actively pursue commercial interests in partnership where necessary. Appendix 2 and 3 depict the location of the sedimentary basins and the activity map on the offshore basins.
Possible Investment Area(s)
Application for exploration blocks in the available blocks is welcomed by any competent investor to exploit the country’s sedimentary basin. The investors stand the chance of enjoying the benefits of discovering and producing oil and gas after the basins have now been de-risked with the numerous discoveries. The process of acquiring an exploration block in Ghana is depicted in Appendix 1.
PROJECT 3 : CRUDE OIL REFINING
INTRODUCTION
The country has one national oil refinery, Tema Oil Refinery which has recently encountered operational and financial challenges with current demands outstripping its current operating capacity. Government through a deregulation policy allowed investors to import petroleum products to support the country’s demand. Government has also opened the business of crude oil refining to serve both domestic and international markets. The government is currently seeking strategic partners regarding the ownership and management of the existing state-owned refinery which is intended to be expanded from its current capacity of 45,000 Barrels per Stream Day (BPSD) to 145,000 BPSD in the long term.
The Project
This project involves:
- Expanding Tema Oil Refinery from the present 45,000 BPSD capacity to 145,000 PPSD.
- Expanding the Crude Distillation Unit (CDU), and Catalytic Reformer.
- Expanding and enhancing the operation of the Residual Fluid Catalytic Cracking (RFCC) Unit.
- Expanding and enhancing the operation of the Light Crude Oil (LCO) Hydro-treating Unit.
- Building a Stand-Alone Bitumen Plant.
Possible Investment Area(s)
The government is seeking strategic investor partnership to execute this project rehabilitating and expanding the Tema Oil Refinery. The investor stands to gain financial benefits from refining crude and selling petroleum products to already existing markets.
PROJECT 4 : EXPORT – ORIENTED REFINERY PROJECT
INTRODUCTION
The Ministry of Energy in pursuance of Government’s Deregulation Policy on the petroleum downstream sector, has created an enabling investment environment through various incentive packages to encourage the private sector, to establish export-oriented oil refineries in Ghana. Pursuant to the vision, Government has adopted of non-recourse financing and therefore does not issue sovereign guarantees to investors but rather prefers to remain a facilitator in the process.
The Project
The export-oriented refinery project requires private investors:
- To invest and operate export-oriented refineries (at least 200,000 BPSD capacity).
- To build the refinery in the free zone enclaves.
- To ensure at most 70% of the refined products are for export with the rest for the local market.
Government Assistance
In view of the above vision, the Ministry of Energy/Government does not directly participate in the activities of the company since it is a private investment. The investor would therefore be requested to note the following in consideration of the project;
- Be prepared to finance the project from start to finish without government involvement.
- Arrange for crude oil feedstock for the proposed refinery.
- Arrange for land suitable for the project and conduct an Environmental Impact Assessment.
- Meet the requirements of the Environmental Protection Agency (EPA) and the National Petroleum Authority (NPA) for Environmental Permit and Construction License respectively.
The Ministry/Government would issues a Letter of Comfort and facilitate the issuance of licenses to prospective investors once the following has been satisfied;
- Proof of funding for the project.
- Technical capability of the company/investor.
- Refinery configuration & product specifications for the refinery.
- A letter from the landowner indicating their willingness to provide land for the project.
- Meet the requirements of the Environmental Protection Agency (EPA) and the National Petroleum Authority (NPA) for Environmental Permit and Construction License respectively.
The process of acquiring the necessary right to build an export-oriented refinery is depicted in Appendix.
PROJECT 5 : BULK PETROLEUM PRODUCTS, PIPELINES & STORAGE
INTRODUCTION
Strategic petroleum products storage and transportation is one of governments strategy in ensuring petroleum products are readily available in the country. The increasing petroleum products demand is increasing the pressure on the existing storage and transportation infrastructures in the country.
The Bulk Oil Storage and Transportation Company Limited (BOST), a state-owned agency, requires significant investments into the construction of petroleum products pipelines and strategic storage depots nationwide. Private sector investors are also encouraged to construct storage depots at strategic locations in the country.
BOST PROJECT
This project involves the construction of storage tanks and pipelines as follows:
- 150 m3 of storage Tank at Takoradi.
- 12-inch Oil Pipeline 300 km from Takoradi to Kumasi.
- 24-inch Gas Pipeline 350 km from Aboadzi to Kumasi.
Possible Investment Area (s)
This project involves the construction of storage tanks and pipelines as follows:
- The private sector is invited to invest in the construction of storage tanks for petroleum products. Notwithstanding the ownership of the tanks, the Government and other third-party operators may rent the facilities for the purpose of importation, storage and re-export to petroleum products.
- The private sector is also encourage to invest in transportation infrastructure such as the acquisition of barges to transport petroleum products from Akosombo in the southern part of the country to Buipe in the north by the lake.
- Investment into railway lines for transportation of petroleum products from TOR to Kumasi depot.
- Investment into the pipeline expansion project to broaden the network of petroleum distribution in Ghana.
PROJECT 6 :INFRASTRUCTURAL DEVELOPMENT AND SERVICE PROVISION IN THE PETROLEUM DOWNSTREAM SECTOR
INTRODUCTION
The government deregulation of the petroleum sector is intended to encourage private sector investment in the provision of infrastructure and other services in the petroleum downstream sector including participation in the importation of crude oil and petroleum products.
With government vision of boosting industrialization and developing an energy economy, the high increasing demands for petroleum products has opened avenues for investors to invest into petroleum products infrastructure development and provision of related services.
Infrastructural development such as LPG plants and filling stations, and services such as Oil marketing, bulk distribution, trading, and retail outlet services are in considerable demand in the sector. Investors are therefore encouraged to pursue such infrastructure development and service provision.
Possible Investment Area(s) and Benefits
Investors are being sought to undertake downstream infrastructure development, especially LPG plants, and to provide services in the distribution, trading, and retailing of petroleum products. The investors would benefit from operating in a conducive environment with already existing markets. The investor could also extend the market to neighbourhood countries such as Togo, Benin, and Burkina Faso among others.
Strategy
The government does not directly get involved in the infrastructure development or service provision. However, there is an independent organisation that provides permit and regulates the activities of such services to ensure they incline with government vision and objectives. In view of this, the investor would be required to meets some requirements before acquiring the license to pursue the infrastructure development and/or service provision. The license requirements depend on the area of investment. However, the basic requirements include:
- Detailed business plan
- Proof of environmental compliance by obtaining an environmental permit
- Financial capability
Appendices 5 and 6 show the flowchart for acquiring a permit to construct an LPG station and oil marketing company services.
PROJECT 7: LNG DEPLOYMENT
The government deregulation of the petroleum sector is intended to encourage private sector investment in the provision of infrastructure and other services in the petroleum downstream sector including participation in the importation of crude oil and petroleum products.
With government vision of boosting industrialization and developing an energy economy, the high increasing demands for power has opened avenues for investors to invest into thermal plants which require LNG as a feedstock.
Infrastructural development such as LNG receiver terminal, storage facilities and the establishment of a transmission network for the transport of LNG across the country.
Strategy
The main objective of this project is to attract private investors to solely undertake the project however; government may consider partnership in the infrastructure development or service provision. An independent organization would provide permit and regulate the operations and activities of the investor to ensure they incline with government vision and objectives.
The government does not guarantee the supply of LNG, the investor where necessary would be required to import LNG for its operations.
Possible Investment Area(s) and Benefits
Investor are being sought to undertake LNG infrastructure development especially LNG receiver terminal, storage and transmission facilities and to market LNG to power plants as feedstock for their operations. The investor would benefit from operating in a conducive environment with already existing markets. The investor could also extend the market to neighbourhood countries such as Togo, Benin, Burkina Faso among others.
PROJECT 8: INVESTMENTS IN THE SERVICE INDUSTRY INTRODUCTION
Ancillary business opportunities an investor could consider include the following:
- Technical audit of Government Agencies
- Shore base facilities with a mini harbour and warehouses
- Onshore support and logistic services.
- Office accommodation for oil service companies & supply chain services
- Expansion and rehabilitation of Takoradi airport and seaports
- Helicopter and fixed wing aircraft transportation
- Supply boats, anchor handling boats, diving vessels
- Real Estate, Telecommunications, Banking, Insurance, Weather forecasting, Search and Rescue Services
- Upgrading of Tema Dry Dock
Hydrocarbon Exploration & Production (E&P) Opportunities
Bidding for blocks or partnering with a potential bidder: This would require licensing data and submitting bids for opened block when a bidding round is announced by the Ministry of Energy. The strategy could be capital intensive, risky but highly rewarding when successful. Farming-in to an already existing acreage or field: There are already awarded acreages, fields under pre-development or producing fields with partners with interest in farming-out some of its share to potential suitors. This is to help them manage its financial outlay in a win-win situation. This approach, depending on the stage of work activities on the field, limits some of the risks in venturing into E&P business. It would be recommended that investors engagement with the partner with the prospect of farming-out, assess the prospects, opportunities, cost prior to formally involving the government and engaging in formal negotiation
Petroleum Refinery, & Petroleum Products Transportation & Storage
The downstream sector has been decentralized making it possible for any registered entity to bring in petroleum products and market it. The government has a refinery plant and entities to hold strategic stock with some transportation infrastructure to convey petroleum products to other sections of the country. Private entities are also free to undertake these services with the decentralization of the sector. This opens opportunities to investors. Opportunities in the sector could be in: Partnership with Government: The government refinery and downstream storage and transport entities have been faced with some challenges that has affected their intended operations. There is a need to revamp, expand and to strategize to fully compete in the sector taking advantage of government support to spearhead the sector. With the financial limitation on government, the government is opened for partnership arrangement with a private entity upon which to help revamp the government entities to be able to meet their expected outcome. It would be recommended that investors engage with the specific entity prior to expressing interest to the government through the Ministry of Energy. Sole Ownership: With the decentralization of the sector, the investor could solely invest into marketing petroleum products, providing petroleum storage services and/or petroleum products transportation services upon granted approval from the downstream regulator (National Petroleum Authority).
Ancillary Services
There are opportunities in providing ancillary services in the sector. Some of these services include: Supply of products and services for upstream industry players Training, consultancy and technical support Facility development Technology development Financial support (loans etc) It should be noted that foreign entities who want to work in the upstream industry must meet the local content and participation requirement. All entities working in the petroleum sector must register with the Petroleum Commission (upstream activities) or National Petroleum Authority (downstream activities).
