London, Nov. 6, GNA – Infrastructure firm Ecowgas, an affiliate of the liquefied natural gas terminal in Tema, is to supply LNG to Burkina Faso after it secured a contract to construct storage and regasification facilities in the landlocked country.
The Tema LNG Terminal Company (TLTC) will act at a regional LNG hub, supplying a reliable supply of cheap and clean LNG into the West African energy mix.
Burkina Faso has now joined Sierra Leone and Liberia as the latest part of Ecowgas’ regional infrastructure network.
Burkina Faso has existing gas demand of 25 million standard cubic feet per day (mmscf/d), which is likely to double in the next four years, according to company estimates.
The domestic market dominated by the supply of gas to gas-powered power stations operated by the state-owned electricity company, Sonabel, and large private sector industrial users, such as mine operators and electricity generators.
By introducing LNG into its energy mix, Burkina Faso will benefit from a reliable baseload of cheap, clean fuel to expedite its transition towards a cleaner energy future, according to industry reports.
In an official statement, Dr Bachir Ismaël Ouédraogo, Burkina Faso’s Minister of Mines and Energy, said: “We are excited about the prospect of LNG in Burkina Faso, and the supply of fuel from Ecowgas will benefit industry and communities alike by reducing costs and increasing energy access for all.
“LNG’s introduction to our country is in line with our government’s priorities to provide a platform to continue our energy transition towards a cleaner future while committing to sustainable economic growth.”
Ecowgas is an affiliate of TLTC, the owner of the LNG infrastructure hub in Tema, which was established to deliver LNG from Ghana to neighbouring West African markets.
The terminal in Ghana will act as a regional LNG hub, with shippers able to bring small-scale LNG into Liberia and Sierra Leone by reloading from the Tema facility.
“This improves the overall economics of small-scale LNG in the region as the terminal can reload any amount of LNG from 7,000 m3 to 30,000 m3, ensuring that supply to smaller regional markets can be flexible to their demand,” Ecowgas said in a statement.
The Tema terminal will create an LNG hub with a storage capacity in excess of 180,000 m3 to serve the regional market.
It means that the need for large amounts of capital expenditure and credit costs to introduce LNG into new countries has been removed, Ecowgas said.
In addition, inland markets such as Burkina Faso could take LNG by truck given that the Ghana facility also has the ability to load LNG directly onto trucks.
According to industry figures, West Africa has a large extractive industry with an appetite for power that is currently mainly served by distillate fuels at high prices.
The award of the Burkina Faso contract is based on Ecowgas using the Tema LNG terminal – sub-Saharan Africa’s first LNG receiving terminal – which will act as a storage hub for LNG within the Economic Community of West African States (ECOWAS).
“With this latest deal, Tema LNG is being positioned as a genuine regional hub and putting Ghana at the forefront of the energy transition.
“This is a great example of a major infrastructure project offering both domestic and regional benefits that will offer environmental and economic advantages to domestic and industrial users alike,” an industry analyst told the GNA.
West Africa needs an estimated one million mt/year of LNG for power generation and displacement of distillates in the extractive sector.
This is expected to grow to about 1.8 million mt/year over the next decade as countries in the region invest in further generation and the transition away from heavier fuels continues in the wake of outcomes from COP26.
Landlocked Burkina Faso could take LNG by truck given that the Ghana facility also has the ability to load LNG directly onto trucks.
It means that the need for large amounts of capital expenditure and credit costs to introduce LNG into new countries has been removed.
In November 2017, UK-based Helios established a consortium alongside Africa Infrastructure Investment Managers and other to form TLTC to develop, construct and operate sub-Saharan Africa’s first LNG import terminal.
Industry experts said then that the arrival of LNG in Ghana, expected before the end of this year, would mark an important milestone for the country as it moved to position itself as a hub for the cleaner and cheaper fuel in the region.
Earlier this year, Robert Besseling, CEO of Pangea Risk, reacting to the Tema hub, said: “Ghana’s approach to energy security is an example to other African economies.
“By diversifying its sources of energy, it encourages reliability and competitive pricing, which will allow for more consistent power generation to boost its economic performance.
“By selecting gas as a transition fuel and connecting to the global LNG supply chain, Ghana has secured first-mover advantage in the push for a greener future,” Mr Besseling added.
GNA