By Belinda Ayamgha, GNA
Accra, Sept. 28, GNA - The pipeline transportation and industrial process heating sectors have been identified as areas where Ghana’s gas sector can be competitive, aside from power generation.
While the gas that Ghana produces has been predominantly used for power generation in the country, investing in the transportation of gas to vantage areas for industrial use and using gas for process heating in industries, are the most competitive non-power utilization options for gas in the country.
Dr Nii Darko Asante, Technical Director of the Energy Commission, in a presentation on the topic: “Creating an Enabling Environment for the Downstream Gas Projects: Promoting Alternative Non-Power Utilization Options”, on the second day of the 5th Ghana Gas Forum in Accra, said it was important however, to put some measures in place to create an enabling environment for investment in these areas of the downstream gas sector.
These measures include ensuring reliable and constant supply of gas, transparency in contracts to ensure that terms are truly commercial and will not be subject to the ‘whims and caprices of governments in power’, among other commercial issues.
Dr. Asante noted that, it was also important, in developing the non-power uses of gas, to be clear about how shortages of gas will be handled in the event that the power sector needs all the gas available or something happens that leads to a shortage or curtailing of gas supply.
He explained that domestic supply from the Jubilee, TEN, Sankofa and other incoming fields, uptake in supply from the West African Gas Pipeline, contracts signed for supply of Liquefied Natural Gas (LNG) and the completion of the project for importation of actual LNG to be stored on-site and used for power generation, will ensure reliable and increased supplies of gas going forward.
However, the domestic supply had a limited supply horizon and while the LNG will assure long-term security of supply, what was needed was the assurance of timely decisions to ensure that gas flow will be constant and uninterrupted, in order to boost confidence.
“If something should happen and there’s a shortage or curtailment of gas, how will it be handled? We all know the importance of power. I don’t think anyone would expect that the power sector will be deprived of gas because of some other industries, there has to be some clarity in our planning process,” he stated, adding that, Ghana could consider putting in place supply guarantees, with possible penalties, in case of interruption.
Dr. Asante also stressed the need to minimize price regulation in the gas sector, in light of how it had affected the power sector, leading to perennial under-recovery of costs.
“We have seen signs that this might creep into the gas sector and I think it is essential that any signs of that are nipped in the bud and we can give some clarity and comfort that costs will be recovered,” he said, adding that, in the long term, there must be measures to ensure that prospective gas users are able to get the cheapest gas available.
Dr Asante, while acknowledging that Ghana’s gas was relatively expensive, said expensive gas could be competitive, although not in all sectors, thus it was important for Ghana to choose its downstream projects based on its costs.
Citing an analysis in the Gas Masterplan, he explained that sectors such as power generation, cement production, transportation with gasoline and diesel, and methanol production could accept high gas prices, because of their costs and selling prices while with steel, aluminum, alumina and urea, there will challenges with absorbing the high cost of gas in Ghana.
The top two most viable identified were transportation and industrial process heating, although Ghana could explore prospects in cement manufacturing and fertilizer production.
GNA
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