19 February 2015, Lagos – A new agreement to proceed with the Offshore Cape Three Point integrated oil and gas project in Ghana is a major boost to the country’s plan to reduce its dependence on gas supply from Nigeria.
The agreement was signed by Italian oil major, Eni, Vitol and Ghana National Petroleum Corporation with the President of Ghana and the Minister of Petroleum, Eni said in a statement on its website.
The OCTP project will provide domestic gas supply to Ghana’s thermal power plants for more than 15 years.
First oil is expected in 2017, first gas in 2018 and the peak production will be 80,000 barrels of oil equivalent per day in 2019, according to Eni.
The OCTP integrated project is a deep offshore development, which comprises oil and non-associated gas fields and will access around 41 billion cubic meters (1.45 trillion cubic feet) of gas and 500 million barrels of oil in place.
The integrated nature of the oil and gas development provides an economically robust project allowing the country to achieve a competitive gas price which will support its economy, said Eni.
It said that the OCTP fields would continuously supply Ghana’s thermal power system, from 2018 to 2036, adding that the supply would be secured thanks to long term contracts with the Government of Ghana.
The project will have a minimal environmental impact being designed for zero flaring and zero discharge, the company said, adding that the non-associated gas will provide environmental benefits feeding both existing power plants, replacing light crude oil, and new power plants, expanding the power generation capacity of the country.
Nigeria is contractually bound to supply 120 million cubic feet per day of gas to Ghana through the West African Gas Pipeline, but the supply through the transnational gas pipeline has been erratic in the past few years.
This has prompted the Ghanaian government to encourage operators to pursue gas production and the development of gas processing infrastructure in the country. In mid-January, the country saw gas production from the Jubilee field ramped up.
Early last year, Ghana was hard hit by gas supply shortage to its power plants due to significant reduction in supplies as Nigeria failed to meet its gas supply obligations by more than 50 per cent of the contractual volume. In September, supply to the country was cut by striking oil workers in Nigeria.
The WAGP, which runs from Nigeria’s gas-rich Niger Delta region to Takoradi in Ghana, shipped an average of 65 mmcfd of natural gas to Ghana in 2012. The pipeline was shut down later in the year following damage to the Togolese section of the pipeline after suspected oil thieves vandalised it.
Protracted delays in repairing the pipeline resulted in no gas supply to Ghana for several months. In 2013, between 40 mmcfd and 50 mmcfd was supplied to Ghana.
With current capacity of 170 mmcfd, the WAGP, which is the first sub-regional natural gas project in sub-Saharan Africa, was initiated by the governments of Nigeria, Benin, Ghana and Togo to supply gas from the Escravos region of the Niger Delta to feed the gas-fired generating plants of the participating countries.
The Chief Executive Officer, Eni, Claudio Descalzi, said, “The OCTP development is a robust integrated oil and gas project that will provide the reliable energy source needed to accelerate the economic growth of Ghana by delivering a domestic solution to feed the power sector.