Why Ghana Gas Tie-In Delayed

Reliable sources in the energy sector have hinted The Finder that the physical Tie-in of the Ghana National Gas Company�s (Ghana Gas) 58-kilometre Offshore Pipeline to that of the 2-kilometre flexible riser of the Jubilee Partners, led by Tullow, was stopped and delayed because of several last-minute requests by the upstream partners on the national gas processing company. The last-minute demands on Ghana Gas, including a request for upward review of the insurance cover on the vessels and the Tie-in process, delayed the project and pile-up pressure on Ghanaian authorities to provide room for upstream partners to negotiate higher stakes in the gas processing infrastructure of the country, The Finder has learnt. According to sources, the Tie-in, which was expected to last a week, was halted midstream and fresh demand for renegotiation of the negotiated insurance cover of $15 million reached in February this year was made. �When the Tie-in started some two weeks ago, there was a fresh demand when the Tie-in got to the last stages for the insurance to be increased to $30 million,� one source said. Consequently, the vessels suspended work until fresh negotiations on the new insurance cover were completed. Work only resumed after the Ghanaian authorities and upstream partners reportedly agreed on $18 million as the new insurance cover for the Tie-in as against the $15 million agreed and signed in February. Credible but unconfirmed reports suggested that by the end of the negotiation, Tullow�s fresh request for extension of its limited flaring mandate beyond October had also been rejected, with a directive to re-inject the gas or deliver the gas to the Atuabo Gas Processing Plant, which has been ready to receive gas from the Jubilee field since August. Tullow and partners, in a news release last Friday, announced the commencement of the physical Tie-in of their flexible riser of the FPSO Kwame Nkrumah to the onshore gas processing facility of Ghana Gas. The news release explained that the permit to affirm that the two parties can safely Tie-in their facilities was issued on October 27, 2014 and that it allows the limited flow of 16 mmscf of gas per day to Ghana Gas� Atuabo plant for the commissioning phase of the project and shall be valid for six weeks. It said the physical Tie-in was expected to take a week to complete and would pave the way for the per-commissioning and commissioning of Ghana Gas� processing plant at Atuabo. The news release noted that on completion of the commissioning, which will take a minimum of 42 days, gas would be made available to the Ghana Gas in commercial quantities for supply to the Volta River Authority�s (VRA) thermal power plant at Aboadze. According to the release, in a crucial meeting with the Minister for Energy & Petroleum, Charles Darku, General Manager of Tullow Ghana, the operator of the Jubilee field, affirmed Tullow's commitment to the realisation of gas flow. �This is a significant milestone in the process towards supplying gas in commercial quantities from the Jubilee field to GNGC on a regular basis and we are excited at its achievement. Given the step-changing role such as regular supply of gas will play in the socio-economic development of Ghana, we are committed to ensuring timely supply to the GNGC. We look forward to the timely completion, certification and permitting of the remaining processes by the relevant regulatory agencies to enable the commercial supply of gas to begin,� he said. The Petroleum Commission (PC) and the Energy Commission (EC) had earlier given the Ghana Gas Company Limited (GGCL) the go-ahead to commission the Atuabo Gas Processing Plant Mr Emmanuel Moses, Head of the Construction Department of Ghana Gas, said: �The good news is that the PC and EC have given the Ghana Gas the permit to commission the completed Atuabo Processing Plant.� He was briefing members of the Western Regional Security Council (REGSEC), including Western Regional Minister, Mr Paul Evans Aidoo, and his Deputy, Mr Alfred Ekow Gyan, during a visit to the plant.