18 December 2011, Sweetcrude, ACCRA – Head of the Ghana National Gas Company (GNGC), George Adjah-Sipa Yankey, has said a $700 million gas project currently underway will be able to pay off a $3 billion Chinese loan five years after operations start.
The GNGC chief executive officer said China’s Sinopec International Petroleum Service Corporation has begun surveying the sites in the country’s oil-rich Western Region where pipelines would be laid and a gas-processing plant constructed.
“Once we start operations, in between four-and-a-half to 5 years we will generate enough money to pay of the entire loan and start making profits,” Yankey told Reuters of a $3 billion loan from the Chinese government approved by Ghana’s parliament in August.
Yankey’s comments come days after the International Monetary Fund (IMF) agreed to disburse $91.55 million of Ghana’s three-year IMF loan and approved changes to loan conditions, allowing Ghana to borrow more money to fund infrastructure projects.
IMF Deputy Managing Director, Naoyuki Shinohara, said after an evaluation of Ghana’s debt, the body decided it could afford to increase its borrowing because the government would be financing projects that would be used to generate enough revenue, Reuters report said..
GNGC and Sinopec signed an agreement last month for the completion of the first phase of the project, expected to be completed in December 2012.
The first phase of the project will involve the construction of a gas processing plant, a 36-kilometer shallow-water offshore pipeline from the FPSO to the plant, a 120-kilometer onshore pipeline to a power plant in Aboadze and a 75-kilometer onshore pipeline to the town of Prestea.
Yankey stated that during the first phase, the gas output will be supplied to power plants in the Western Region and that the plant is expected to process 150 million cubic feet of gas daily, and this would increase as the project continued.
“During the second phase we hope to expand the facility to process 450 million cubic feet of gas daily,” Yankey said, emphasizing that they planned to lay pipelines as soon as other wells began producing.
Echoing statements made by Vice President John Dramani Mahama on last week, Yankey said that when the 3-year project was completed in 2015, Ghana would become a regional exporter of electricity.