Ghana go-ahead for Eni and Vitol deep-water development
The $7bn development will be crucial for Ghana when it starts to flow in 2018
Eni and partner Vitol are to move ahead with a multi-field deep-water development which will produce oil for export and gas for the Ghanaian market. The $7 billion investment, described as transformational for the electricity-short country, will see gas landed for power generation for more than 15 years.
The development covers fields in the Offshore Cape Three Points block, off western Ghana, where the exploration campaign was completed only two years ago. Three non-associated gasfields, Sankofa Main, Sankofa East and Gye Nyame, and two oilfields, Sankofa East Cenomanian and Sankofa East Campanian, will be brought on stream through a floating production, storage and of-floading vessel. Reserves in-place are put at 41bn cubic metres of gas and 500m barrels of oil.
Gas from the fields, 60 km offshore in water 600-1,000 metres deep, will be landed by pipeline to a receiving facility to be constructed at Sanzule. From there it will be injected into Ghana National Gas Company's Western Corridor gas pipeline, for supply to generating stations and industry. Eni says oil production will start in 2017, with gas starting to flow in 2018. Output will reach a peak of 80,000 barrels of oil equivalent a day in 2019.
The start of development work marks a considerable success for trading company Vitol, which originally took the Offshore Cape Three Points licence as operator under its strategy of buildingnup its own exploration and production assets. The firm discovered Sankofa in 2009 with its first well, and brought in Eni as a partner and operator to implement a fast-track exploration and appraisal programme. Interests are Eni with 47.222%, Vitol with 37.778%, and the state's Ghana National Petroleum Corporation with 15%.
International organisations, including the World Bank, have argued that Ghana's growth is being limited by inadequate availability of electricity. The start-up in 2008 of the West African Gas Pipe-line, which flows Nigerian gas to Benin, Togo and Ghana, was intended to resolve the problem, supplying gas as far west as Ghana's Takoradi thermal power station. But flows through the system have been unreliable, with long shut-downs due to damage.
In readiness for gas supplies from the new fields, the government has plans for the construction of 700 megawatts of new generating capacity by 2017. Gas is also due to replace fuel oil and crude oil, used as generating fuels in many of the country's power stations. Meanwhile, the Atuabo gas processing facility, which is due to receive gas from Tullow's Jubilee field, was being commissioned in January. From Atuabo, gas will be piped to the Takoradi power station, which can run on gas or crude oil but has been mainly burning crude.