The Institute for Energy Security (IES) has asked government to rescind its decision to build a Liquified Natural Gas (LNG) facility in the country.
According to IES, such a facility is not needed at this moment as it will only contribute to the excess gas supply and come at a cost to the country.
They argue that industry reports prove that there is sufficient supply from domestic sources to meet the country’s gas needs.
Both natural gas liquefaction and regasification are strategic options open to the Government of Ghana (GoG) within the natural gas sub-sector. However, the Institute for Energy Security believes the country’s short-term and long-term priorities must be set right, so the country does not pay for what it does not need immediately.
Industry report shows that the raw gas exported to Ghana National Gas Company (GNGC) from the three producing fields represent less than 38 percent of produced gas compared to reinjected and flared gas which is in excess of 68,000 million standard cubic feet (MMscf), constituting 59 percent-plus of produced gas.
The IES believes that the country has failed to make optimal use of its natural gas resource while it struggles to off-take the gas, hence the decision to re-inject and flare.
They also believe the country is better off prioritizing investment into gas liquefaction which can be exported to neighbouring countries which are in need of gas.
However, the Tema LNG terminal which is currently under construction is expected to be operational within the first quarter of this year and will allow Tema to start delivering LNG to customers.
In an interview with Citi Business News, a research analyst with IES, Fritz Moses said government must rather stimulate demand by putting in place relevant gas infrastructure and regulatory policies to resolve the issue of unutilized gas.
“We already have excess gas being produced in the Western Region and when you are importing more gas at an extra cost that means you are putting extra burden on the country’s finances. What we are suggesting is that there should rather be a liquefaction unit at Tema because that is the easiest point where we can reach other countries and where we can have the gas that we are producing in excesses at the Western Region being processed into a liquid form and transported to other countries who need gas”.