London — Ghana is preparing to become sub-Saharan Africa's first LNG importer, with the terminal at the port of Tema set to receive its maiden cargo in the coming weeks.
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There are a number of LNG export projects across North and West Africa, but Egypt in 2015 became the first -- and so far only -- African country to import LNG.
But that is set to change as Ghana gears up to begin LNG imports. "The terminal at Tema will be mechanically ready for full operation at the end of March," a project spokesman told S&P Global Platts March 4.
"We are waiting for Shell, the supplier, and GNPC as the offtaker to decide and confirm the delivery date for their first cargo to arrive at the terminal," he said.
A Shell spokesman said March 5 the company was unable to give any guidance on timings for the first cargo, while GNPC could not be reached for comment.
However, it has been expected that the first cargo would arrive by the end of the first quarter of 2021.
The Tema LNG terminal -- backed by Helios Investment Partners and Africa Infrastructure Investment Managers -- is made up of a dedicated floating regasification vessel and a separate LNG storage vessel, and has the capacity to import 1.7 million mt/year of LNG.
LNG will be supplied under a long-term contract with Shell, which said last month in a strategy presentation that it wanted to grow its LNG market footprint by creating new markets, including being a first supplier of LNG to Ghana.
In January, Spain's Reganosa was awarded the contract to operate and maintain the terminal as well as an associated 6-km gas pipeline.
"Tema LNG's year-round supply of gas will enable GNPC to supply reliable and cost-effective gas into the Tema power and industrial enclave," Edmund Agyeman-Duah, the project manager of the Tema LNG Terminal Company, said at the time.
LNG will add to Ghana's own gas production and imports from Nigeria via the West African Gas Pipeline (WAGP), though these have been subject to frequent interruptions.
The WAGP -- which also provides Nigerian gas to Benin and Togo -- is one of only two trans-national gas pipelines in sub-Saharan Africa, the other being a pipeline from Mozambique to South Africa.
LNG is therefore seen as a quick way for African countries -- which are expected to see growing gas demand in the coming years especially for power generation -- to gain easier access to gas supplies.
More FSRUs have been planned across sub-Saharan Africa, including in Cote d'Ivoire, Benin, Namibia, South Africa, Kenya and Sudan, though none are expected to be realized any time soon.
Equatorial Guinea is also planning a small LNG import terminal on its mainland, but it is thought the facility is to be used to take LNG from its EG LNG export plant on Bioko Island for storage and for feeding gas to the mainland.
For Ghana, the start of LNG imports is seen as a boost for developing its gas-fired power generation sector.
Risk consultant Pangea-Risk said last month that the inclusion of LNG in the energy mix was "critical" for Ghana's growth and development, and would boost its clean energy transition with gas displacing heavier fuels.
"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," it said.
According to a report published last month by the African Coalition for Trade and Investment in Natural Gas (ACTING), Africa is expected to witness the biggest growth potential in gas consumption by 2040, with an annual growth rate expected at some 3.2%.
"Growth is anticipated to be supported by an increasing policy push across sub-Saharan Africa to further monetize domestic gas, generate electricity, and provide reliable power to industries," ACTING -- launched Feb. 3 by the African Energy Chamber and investment research company Hawilti -- said in its inaugural report.
Some 13 countries in sub-Saharan Africa burn gas for power generation, of which 10 (including Angola, Cameroon and Nigeria) use their own domestic gas production. Togo and Benin are reliant on imports and Ghana uses a combination of domestic production and imports.
South Africa terminal
South Africa could be next in line to develop an LNG import terminal.
US major ExxonMobil and Netherlands-based storage giant Vopak agreed in December last year a preliminary deal on carrying out a feasibility study for a potential terminal.
South Africa has been seeking foreign investors to back an LNG import terminal for several years as it looks toward a major expansion of gas-fired power generation.
The companies said LNG would help South Africa reduce its greenhouse gas emissions through the sourcing of a "cost-effective" fuel source.
In 2019, state-owned Transnet said it had entered into a cost-sharing agreement with IFC, a member of the World Bank Group, to conclude a feasibility study for an LNG terminal at the port of Richards Bay.
It said at the time that the facilities were expected to be operational by 2024.