Golar agrees to provide FSRU for Ghana gas imports
Ghana could be the first country in sub-Saharan Africa to play host to a floating storage and regasification unit (FSRU)
Golar said on 4 November that it would provide WAGL with the newbuild 170,000cm Golar Tundra FSRU, which is being delivered from Samsung’s South Korean shipyard via Singapore later in November. WAGL is jointly owned by Nigerian National Petroleum Corporation (60%) and Sahara Energy Resource (40%).
The contract will run for five years initially, with the option for WAGL to extend it for a further five years. Scheduled start up for the project is the second quarter 2016. Golar estimates the contract’s first-year earnings before interest, taxes, depreciation and amortization will be $44m.
In October, Golar announced it had secured financing for the Golar Tundra, which it said would cost up to $216m. The deal, which also provided finance for another FSRU, Golar Tundra, was struck with China Merchants Bank Leasing and would release some $150m in cash for Golar, the company said. Golar is also active in the nascent African floating LNG market and in September took a positive final investment decision on its Cameroon FLNG project, due to be commissioned in the second quarter 2017.
The FSRU could be the first of several to be deployed in sub-Saharan Africa as countries in the region seek to take advantage of forecast ample global LNG supply to meet growing domestic energy demand and provide an alternative to their often-unreliable existing energy supply. FSRUs have also been proposed for Benin, Ivory Cast, Namibia, South Africa, Mozambique and Kenya among other nations, though none is operational yet.
Ghana has been prone to energy shortages and electricity blackouts over recent years, so fresh supply has become and economic and political imperative for the government, whose president, John Mahama, faces elections next year.
The country’s power problems stem in part to sometimes-unreliable supply from Nigeria through the West African Gas Pipeline (WAGP), from which Ghana sources a quarter of its gas supply. The relationship between the two countries has also been far from smooth. As recently as mid-October, Nigeria threatened to severely curtail gas exports to Ghana through the WAGP in a dispute over an outstanding $181m debt owed to Nigeria’s N-Gaz by Ghana’s state power firm the Volta River Authority and other Ghanaian organisations. In the end, emergency talks produced a deferral of the threatened gas supply restrictions, while a financial agreement was sought.
Additionally, delays in developing Ghana’s own offshore gas resources for domestic use and the highly variable nature of Ghana’s hydropower output, which accounts for up to 50% of electricity supply, have hampered power supply.
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