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Project developers General Electric (GE) and Endeavor Energy have, along with energy partners Eranove and Sage Petroleum, agreed to a supply term sheet with petroleum giant Shell and have entered into exclusive sale and purchase agreement (SPA) negotiations regarding the long-term supply of liquefied natural gas (LNG) to the Ghana 1000 project.
The Aboadze-based project was an integrated 1 300 MW gas-to-power project that would comprise a floating storage and regasification unit (FSRU) and infrastructure required to import LNG.
Once completed, Ghana 1000 was expected to become the largest power park in sub-Saharan Africa and would generate reliable power for Ghana, as well as help lower the cost of generating power for the country by up to 35% when compared with power generated from light crude oil.
The project’s first development phase was expected to be completed in late 2016 and would add 125 MW to the national grid. This would increase to 750 MW by 2018 and to 1 300 MW within five years.
“We are delighted to have reached agreement with Shell on the key parameters of a long-term LNG supply arrangement and have entered into exclusive discussions on a long-term LNG supply for the Ghana 1000 project.
“Securing a reliable, flexible and affordable LNG supply arrangement is a critical piece of the puzzle to make this project a reality,” GE Ghana CEO Leslie Nelson said in a statement on Tuesday.
Endeavor Energy CEO Sean Long added that the inclusion of Shell demonstrated the degree of interest and support in the project and added to the project’s “world-class” roster of participants.
“Importing LNG offers tremendous flexibility for Ghana to manage its power fleet. As a lower-cost alternative to light crude oil, LNG can be used not only on a long-term basis for new power projects, but can be imported on a spot basis to balance any short-term disruptions from Ghana’s domestic gas production or from diminished hydroproduction in years with low rainfall,” he commented.
Nelson, meanwhile, disclosed that wholly-owned Ghanaian company Sage Petroleum had become the latest participant to join the consortium, fulfilling the consortium’s commitment to ensuring the localisation of operations in Ghana.
Endeavor Energy and GE last month announced the signing of an agreement with Excelerate Energy, a provider of FSRU, for the reservation of an FSRU that would provide storage and regasification of LNG for the Ghana 1000 project.