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Chinese oil conglomerate to build gas pipeline

Ghana Gas recently signed a contract for the construction of an onshore gas pipeline.

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The Ghana National Gas Company (Ghana Gas) has sealed a deal with Chinese multinational oil fields service company, Yantai Jereh group.

The contract which was signed on 11th April, 2017 is to commence the construction of an onshore 278 kilometer natural gas pipeline infrastructure from the Takoradi Aboadze enclave to the power enclaves of Tema Greater Accra. The recent execution of the agreement which represents a revival of a project which was initially conceived last year enabled the immediate commencement of site work such as topographical/ geotechnical site surveys and Front end engineering designs (FEED) which are already underway, as well as on site civil construction activities which will commence within the next ten days.

The project structure consists of a 15-year Build Operate and transfer (BOT) model that would see the full financing of the construction activities by the Yantai Jereh group and other investment partners with government bearing no advance payment cost.

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The Chinese company would reimburse its investment in the project by charging transportation fees based on volumes of gas being moved through the pipeline over a period of 15 years after which ownership of the entire infrastructure will be transferred to the Ghanaian government completely free of any recurring charges or financial encumbrances.

It is proposed that approximately $1.56USD per MMBtu (A standard unit of measurement used to denote the amount of heat energy in fuels and the ability of appliances) would be charged as transportation fees as it has been for similar gas transportation services by the West African Pipeline Company (WAPCO) in the past. This new onshore pipeline would also see to the smooth transportation of natural gas energy resources produced in oil fields in the Western region to the eastern parts of the country through different regions along Ghana’s coastal line.

Soon to be constructed to compliment to project are multiple regional natural gas distribution stations between the two major load centers of Takoradi and Accra. These stations will enable manufactures wishing to construct factories to connect directly to the infrastructure thus receiving cost effective natural gas to power their industrial operations. Senior Vice President for West African division of the Yantai Jereh group Gao Yong, who will also be the project lead to see the complete implementation of the project went on record to say “This project represents a massive opportunity of growth for both Ghana and the Yantai Jereh group, we have been highly impressed with the new administration and their ability to get things done quickly and professionally”

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