Institute policies to deal with unutilised gas – IES to government

The Institute for Energy Security (IES) has asked government to rescind its decision to build a Liquified Natural Gas (LNG) facility in the country.

According to IES, such a facility is not needed at this moment as it will only contribute to the excess gas supply and come at a cost to the country.

The Institute in a report argued that industry reports proved that there was sufficient supply from domestic sources to meet the country’s gas needs.

Both natural gas liquefaction and regasification are strategic options open to the Government of Ghana (GoG) within the natural gas sub-sector.

However, the Institute for Energy Security believes the country’s short-term and long-term priorities must be set right, so the country does not pay for what it does not need immediately.

Industry report shows that the raw gas exported to Ghana National Gas Company (GNGC) from the three producing fields represent less than 38 per cent of produced gas compared to reinjected and flared gas which is in excess of 68,000 million standard cubic feet (MMscf), constituting 59 per cent-plus of produced gas.

The IES believed that the country had failed to make optimal use of its natural gas resource while it struggled to off-take the gas, hence the decision to re-inject and flare.

The Institute also believed the country was better off prioritising investment into gas liquefaction which could be exported to neighbouring countries which were in need of gas.

However, the Tema LNG terminal which is currently under construction is expected to be operational within the first quarter of this year and will allow Tema to start delivering LNG to customers.

In an interview with Citi Business News, a research analyst with IES, Fritz Moses said the government must rather stimulate demand by putting in place relevant gas infrastructure and regulatory policies to resolve the issue of unutilised gas.

“We already have excess gas being produced in the Western Region and when you are importing more gas at an extra cost that means you are putting extra burden on the country’s finances. What we are suggesting is that there should rather be a liquefaction unit at Tema because that is the easiest point where we can reach other countries and where we can have the gas that we are producing in excesses at the Western Region being processed into a liquid form and transported to other countries who need gas, ” he said.