Oil & Gas
Considering LNG as viable solution for West Africa energy hiccup
West African region is strategic when it comes to the current economic dynamics in Africa because of her huge potentials in both natural and human resources. However, the challenge of insufficient power infrastructure continues to slow the attainment of her full potentials.
Nigeria is the largest exporter of LNG in Africa, as Equatorial Guinea also have joined the ranks of Liquefied Natural Gas Liquefied Natural Gas (LNG) exporters producing 3.6 million tons per annum (MTPA), about one-fifth of its close neighbour, Nigeria.
As laudable as this achievement maybe, one of the key questions industry close watchers have continued to ask is to what extent could LNG play a role in helping West Africa overcome its power issues?
Analyst are of the views that the consideration of LNG as a viable solution to power makes sense given that most of West Africa has maximized its large-scale hydropower resources, with the Volta Dam, the largest hydroelectric facility currently in West Africa, currently serving Ghana and its neighbouring three countries.
According to them “an increase of over 85 GW would require a total gas supply of about 22,000 mmscfd, equivalent to 22 billion standard cubic feet per day (bscfd). In terms of LNG, this would require about 160 MTPA of regasification facilities. Simply for a very rough, back-of-the- envelope measure of the financial implications it is useful looking at some current industry costs”.
Report indicates that capacities of onshore LNG Receiving (Regasification) Terminals vary widely, but gas contractors have been building such facilities around the globe at the cost of about $1.2 billion for a 2-bscfd facility.
A report by Energy Information Agency estimates that the overnight Capital Costs for Advanced Natural Gas Cycle plants are approximately $1M per MW, meaning another $85 billion for the 85,000 MW of thermal generation equipment and installation. This is a heavy price tag that would require unprecedented political commitment and executive ability.
The report further show that some infrastructure already exists that could take advantage of regasification terminals – the West African Gas Pipeline, running almost 700km from the Itoki Terminal in Lagos Beach along the Benin and Togolese coasts and terminating at two thermal generation sites in Ghana, has been delivering natural gas since it was commissioned in 2009 – but only about half the amount it had been contracted for.
The pipeline is designed for a peak capacity of 460 mmsfcd, which could accommodate a regasification terminal of about 3.5 MTPA capacity, and would enable about 1840 MW of extra power generation for Ghana, Benin, Togo possibly Ivory Coast and Burkina.
In the opinion of industry close watchers it has become clear that a pure LNG solution at over $100 billion immediate capital cost might be a stretch and not represent the optimal distribution of capital, adding that a mixed basket of various power generation solutions may be more practical, cost-effective and nationally acceptable.
“Within such a mix, LNG could still play a key role as a regasification terminal hooking into the West African gas pipeline would greatly ease pressures for at least 5 or 6 countries in that belt”, they observe.
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