INVESTMENT OPPORTUNITIES IN THE PETROLEUM SECTOR

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Sibyl Stephens
8 years ago
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1 INVESTMENT OPPORTUNITIES IN THE PETROLEUM SECTOR PROJECT 1 Introduction The Jubilee Filed oil is of light quality and has high gas content. For every 1,000 barrels of oil that is produced, there is an associated gas of one million standard cubic of gas. Government is therefore embarking on a zero gas flaring policy in order to fully utilize the associated gas of the Jubilee fields. The anticipated utilization of the gas include as a primary energy for power generation, feedstock for petrochemical industry and as a source of energy in the industrial sector. Project Objectives The general objective of the project is a regional hub for the development of petrochemical industry in Ghana. Specifically, the project aims at harnessing the associated gas from the Jubilee Field to supply cheap gas for power generation, industrial application and for domestic uses. The gas infrastructure of the project will also facilitate the exploitation of the stranded gas in the North and South Tano fields. Strategic Plan The project would be executed along the following strategic path: To bring the associated gas from the Jubilee Field to shore; To process the wet gas into dry gas and liquids including LPG, Condensate and Propane; To supply the gas for electricity generation and for other industrial applications To supply LPG for domestic use; To exploit the other liquids such as propane, butane and condensate. PROJECT 2 Hydrocarbon Exploration and Development Ghana s hydrocarbon potential have not been fully explored and developed. Government has put in place a favourable fiscal and regulatory regime for the exploration and development of the country s hydrocarbon resources. Government is reaching out to oil companies and other investors to explore and develop the country s hydrocarbon resources.

Government is therefore embarking on a zero gas flaring policy in order to fully utilize the associated gas of the Jubilee fields.

2 Project Description Phase 1 of this project involves the construction of a 16 inch pipeline; 80 km high pressure pipeline from the Jubilee field to transport 300 mmscfd rich gas to a processing plant onshore at Bonyere, 30km of the pipeline will be in deep water. Phase 2 involves the construction of a 10 inch Pipeline, 123 km from Bonyire/Atuabo to the Aboadze Thermal Power Plant 20 inch 150km onshore dry gas transmission pipeline with compressor stations from the Gas Processing Plant to Takoradi. 6 inch dry gas line from the Gas Processing Plant to Osagyefo Power Plant in Effasu. 8 inch 17km export line from the Gas Processing Plant to an Export Buoy. 3 units of 250,000 barrels capacity storage tanks for LPG, Condensate and Propane respectively. PROJECT 3 Crude Oil Refining Government has opened the business of crude oil refining to include private sector-owned refineries to serve both domestic market and also for export. Government is currently seeking strategic partners regarding the ownership and management of the existing state-owned refinery which is intended to be expanded from its current capacity of 45,000 Barrels per Stream Day (BPSD) to 145,000 BPSD. This project involves: Tema Oil Refinery Expansion from the present 45,000 BPSD capacity to 145,000 PPSD Crude Distillation Unit (CDU), and a Catalytic Reformer, Residue Fluid Catalytic Cracking (RFCC) Unit, Light Crude Oil (LCO) Hydro-treating Unit Stand Alone Bitumen Plant. PROJECT 4 Export-oriented Refinery Project The private sector is invited to invest and operate export-oriented refineries (at least 200,000 BPSD). The refineries would be located in the free zone enclaves.

Phase 2 involves the construction of a 10 inch Pipeline, 123 km from Bonyire/Atuabo to the Aboadze Thermal Power Plant 20 inch 150km onshore dry gas transmission pipeline with compressor stations

3 70% of the refined products for export whilst 30% would be for local market. Government Assistance The Ministry of Energy will issue comfort letters to investors. The Ministry/Government will facilitate the issuance of licenses to prospective investors PROJECT 5 Bulk Petroleum Products Pipelines and Storage The Bulk Oil Storage and Transportation Company Limited (BOST), a stateowned agency, requires significant investments in the construction of petroleum products pipelines and strategic storage depots nationwide and private sector investors are also encouraged to construct storage depots at strategic locations in the country. This involves the construction of storage tanks and pipelines as follows: m 3 of Storage Tank at Takoradi - 12 inch Oil Pipeline 300 km from Takoradi to Kumasi - 24 inch Gas Pipeline 350 km from Aboadze to Kumasi STORAGE AND TRANSPORTATION FACILITIES The private sector is invited to invest in the construction of petroleum products storage tanks. Notwithstanding the ownership of the tanks, the Government and other third party operators may rent the facilities for the purposes of importation, storage and re-export of petroleum products. The private sector is also encouraged to invest in transportation infrastructure such as the acquisition of barges to transport petroleum products from Akosombo in the southern part of the country to Buipe in the north by lake. Rail way line for transportation of petroleum products from TOR to Kumasi depot. The laying of pipelines to broaden the network of petroleum distribution in Ghana. PROJECT 6 Natural gas Secondary Market Infrastructure The non-power generation users of WAGP gas constitute the Secondary Gas Market (SGM). Gas in the SGM is expected to be used primarily by industrial and commercial establishments initially.

Limited (BOST), a stateowned agency, requires significant investments in the construction of petroleum products pipelines and strategic storage depots nationwide and private sector investors are also

4 This network will increase the gas volumes consumed and enhance the WAGP project s economic and financial viability. Initial market targeted is the Tema/Accra market, then Takoradi. Relevant policy and regulatory framework documents have been developed and undergoing review The West African Gas Pipeline Project (WAGPP) will enable Ghana to secure natural gas supplies from the huge reserves in Nigeria. While the primary use of the gas will be for power generation, the Ghana Government intends to develop a secondary gas market for the distribution and sale of natural gas for other purposes particularly as a substitute fuel for industrial production. The development of the infrastructure for the secondary gas market and the operation and management of the natural gas distribution business is to be undertaken by the private sector in partnership with Government. PROJECT 7 INVESTMENT IN THE SERVICE INDUSTRY Ancillary business opportunities will include the following: Shore base with a mini harbour and warehouses. Onshore support and logistics. Office accommodation for oil service companies & Supply chain services. Expansion and rehabilitation of Takoradi airport. Helicopter and fixed wing aircraft transportation. Supply boats, anchor handling boats, diving vessels. Real Estate, Telecommunications, Banking, Insurance, Weather forecasting, Search and Rescue Services. Upgrading of Tema Dry Dock. Oil and Gas from the Jubilee field will be a source of feedstock and cheap fuel for the intended Jubilee Industrial Estate to be established in the Western Region as a petrochemical hub.

5 Business Type Drilling Transportation Fuel Communication Construction facilities Construction- Pipeline Office requirements Personnel Requirement Safety and Medical Logistics Accommodation and Meals Description Drilling Rigs, Service Rigs, Colied Tubing, Cementing, Simulation, Wire line, Down hole Tools Vehicle Rental, Trucking, Helicopter, Fixed Wing Aircraft Bulk Fuel, propane, Diesel Fuel, Aircraft fuel, Gasoline, Grease, Fuel Oil, Lubricating oil, Glycol and chemicals Telecommunications, Cellular phones, High-speed internet and Cable TV Surveing,Building Supplies, Hardware, Paint, Lumber supply and plywood, Electrical contracting and supplies, Plumbing contracting and supplies, Carpentry and finishing, Heating, Ventilation and air conditioning supply, Installation and maintenance, Electrical power generation and supply. General contracting, Timber for Pipeline skids and survey laths, Welding services and supplies, such as acetylene and oxygen Office spaces, supplies, furniture, Computers and other equipment Secretarial, Clerical, Word Processing, Accounting, Bookkeeping and Payroll services Medical facilities, Supplies, Services, air and ground ambulance, Safety officers Materials handling, Expediting, Freight transport, Light delivery and Courier services Apartments, Hotels and Motels, Camps, Restaurants, Grocery stores

Aircraft fuel, Gasoline, Grease, Fuel Oil, Lubricating oil, Glycol and chemicals Telecommunications, Cellular phones, High-speed internet and Cable TV Surveing,Building Supplies, Hardware, Paint,

6 EXPORT ORIENTED REFINERY The Ministry of Energy in pursuance of Government s Deregulation Policy on the petroleum downstream sector, has created an enabling investment environment to encourage the private sector, through various incentive packages, for the establishment of export-oriented oil refineries in Ghana. Pursuant to this vision, Government has adopted the policy of non-recourse financing and therefore does not issue sovereign guarantees to investors but rather prefers to remain a facilitator in the process. In view of the above, the Ministry of Energy/Government does not involve directly in the activities of the company since it is a private investment. You are therefore requested to undertake the following in order to proceed with the project; 1. Be prepared to finance the project from start to finish without government involvement 2. Arrange for your own crude oil feedstock for the proposed refinery 3. Arrange for a land suitable for the project and conduct an Environmental Impact Assessment 4. Meet the requirements of the Environmental Protection Agency (EPA) and the National Petroleum Authority (NPA) for Environmental Permit and Construction License respectively Prior to issuing a Letter of Comfort, you must satisfy the following requirements; 1. Proof of funding for the project. 2. Technical capability of your company 3. Refinery configuration & products specifications for the refinery 4. A letter from land owner indicating their willingness to provide land for the project

Pursuant to this vision, Government has adopted the policy of non-recourse financing and therefore does not issue sovereign guarantees to investors but rather prefers to remain a facilitator in the

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