AceP Urges Ghana to Ground Second Gas‑Processing Plant in Supply, Finance and Expertise
The Africa Center for Energy Policy (ACEP), an independent think‑tank based in Accra, has called on Ghana’s government to base the forthcoming second gas‑processing plant (GPP2) on three pillars: reliable gas volumes, credible financing arrangements, and proven technical capability. In a recent statement, ACEP warned that allowing political considerations to drive the project could jeopardise its long‑term value for the nation.
Why GPP2 Matters for Ghana’s Energy Future
Ghana’s existing Atuabo gas‑processing facility, commissioned in 2015, has been a cornerstone of the country’s gas‑to‑power strategy, supplying roughly 150 million standard cubic feet per day (MMscfd) of processed gas to thermal power plants. According to the Ghana Energy Commission, domestic natural‑gas demand rose from about 200 MMscfd in 2020 to an estimated 280 MMscfd in 2023, driven by expanding industrial load and additional power‑generation units.
With demand outpacing Atuabo’s capacity, policymakers have proposed GPP2 to boost processing capability, curb gas flaring at offshore fields, and enhance fuel security for the thermal fleet. ACEP acknowledges the plant’s potential to strengthen energy security, reduce flaring‑related emissions, and support the government’s goal of increasing the share of gas in the power mix to 60 % by 2030.
Key Risks Highlighted by ACEP
- Unsecured gas supply: ACEP’s head of petroleum and conventional energy, Kodzo Yaotse, noted that “constructing a gas processing plant without secured volumes risks creating an expensive, underutilized asset.” Without firm upstream commitments—such as long‑term sales agreements from the Jubilee, TEN, and Sankofa fields—the plant could operate well below design capacity, eroding its economic viability.
- Financing transparency: The think‑tank stresses that financing must be transparent, sustainable, and structured to avoid placing undue fiscal burden on the state. ACEP recommends incorporating upstream partners into the financing mix, allowing revenue‑sharing or tolling arrangements that align cash flows with actual gas throughput.
- Technical competence: Selecting a contractor with demonstrable experience in large‑scale gas processing is critical. ACEP advises that technical capability should be a decisive criterion in the tender process, ensuring the plant meets international safety and efficiency standards from day one.
Recommendations for a Robust GPP2 Framework
To translate the plant’s promise into tangible benefits, ACEP proposes the following steps:
- Secure binding gas‑supply contracts covering at least 80 % of GPP2’s design capacity before final investment decision (FID).
- Structure financing through a combination of sovereign guarantees, development‑bank loans, and equity stakes from upstream operators, with clear covenants on debt service coverage ratios.
- Adopt an international competitive bidding process that evaluates bidders on technical track record, health‑safety‑environment (HSE) performance, and life‑cycle cost analysis.
- Implement a transparent monitoring framework, overseen by the Ministry of Energy and the Public Utilities Regulatory Commission, to track progress against milestones and disclose key contract terms to the public.
Broader Context: Regional Gas Market Dynamics
Ghana’s push for additional processing capacity mirrors trends across West Africa, where nations such as Nigeria and Côte d’Ivoire are expanding midstream infrastructure to monetise associated gas and reduce flaring. The African Energy Chamber estimates that regional gas demand could grow by 4‑5 % annually through 2030, underscoring the strategic timing of investments like GPP2—provided they are grounded in realistic supply and financing assumptions.
Conclusion
While the second gas‑processing plant holds promise for Ghana’s energy security and industrial development, ACEP’s cautionary note serves as a reminder that infrastructure of this magnitude succeeds only when built on a foundation of verified gas volumes, sound financial engineering, and proven technical expertise. By aligning the project with these principles, Ghana can avoid the pitfalls of underutilised assets and secure a resilient, cost‑effective gas‑to‑power value chain for years to come.
