The West African country of Ghana is moving ahead with a second major gas-to-energy project despite the many troubling experiences encountered during its first, a situation that mirrors Guyana’s own struggles with the controversial Wales Gas-to-Energy Project.
Despite the hurdles surrounding the initial development, the PPP/C Government has insisted that a second project must be completed before the end of its second term in office.
According to the Africa Centre for Energy Policy, the Ghana National Gas Company (GNGC) was established in 2011 to manage the country’s natural gas resources and oversee construction of the Atuabo Gas Processing Plant in the Western Region, which was initially slated for completion in 2012. However, significant delays pushed the plant’s official commissioning to November 2014, when it began processing raw gas from the Jubilee Field to supply electricity.
A May 2014 public interest report by Mohammed Amin Adam, Executive Director of the Africa Centre for Energy Policy, and Benjamin Boakye, Programmes Director of the organisation, stated that “the project, which is being executed by SINOPEC, has failed to meet several completion dates. Indeed, the project has been delayed for four years.”
The report noted that funding challenges were among the major causes of the delays, particularly issues surrounding the disbursement of a US$3 billion China Development Bank (CDB) facility, part of which was earmarked for the gas project.
“As of September 2013, US$598,945,463.25 was disbursed to SINOPEC, comprising US$509,103,643.77 from CDB and US$89,841,819.48 from the Government of Ghana counterpart funding,” the report stated
The report also raised concerns about procurement practices, highlighting discrepancies including sole-sourcing of contracts instead of utilising international competitive tendering processes. It further noted that Ghana had rejected a financing facility offered by the World Bank, despite concerns over financial management and transparency.
Beyond procurement concerns, environmental issues also emerged. According to the report, one of the most significant environmental risks involved plans for transporting liquefied petroleum gas (LPG) from Atuabo to Accra.
“Although the original plan for LPG transportation favoured the use of sea vessels, for which a jetty was to be constructed, Ghana Gas has once again thrown caution to the wind. LPG will now be transported to Accra by road through trucks. With about 700 metric tons of LPG expected daily, it will take about 40 LPG trucks travelling every day on the roads from Atuabo through the main Elubo highway to the market,” the report stated.
Despite the controversies and setbacks surrounding the first project, Ghana is now pressing ahead with a second major gas initiative.
On May 12, Ghana’s Ministry of Finance reported that Finance Minister Dr. Cassiel Ato Forson described the planned Second Gas Processing Plant (GPP II) as a “game-changing” project capable of transforming the country’s energy landscape, creating jobs, and saving the economy hundreds of millions of dollars.
Speaking during the inauguration of the GPP II implementation committee at the Ministry of Energy and Green Transition, Dr. Forson said Ghana’s overreliance on expensive liquid fuels to power electricity plants had become unsustainable, costing the country more than US$1 billion annually.
“Without the Atuabo Gas Plant, Ghana would have been in deep trouble. Today, we face a similar opportunity to secure our future,” he stated.
According to the finance minister, the new plant could save Ghana nearly half a billion US dollars every two years while generating more than 1,000 direct and indirect jobs.
Meanwhile, Guyana has not yet completed its first gas-to-energy project, which has been plagued with issues similar to those experienced in Ghana. The Wales Gas-to-Energy Project, initially expected to be completed in 2024, has missed several deadlines with little public explanation from the government.
On April 12, this publication reported that after years of criticising the former APNU+AFC Coalition Government for concealing Guyana’s Production Sharing Agreement (PSA) with ExxonMobil, the PPP/C administration similarly withheld contracts linked to the Wales Project, which has now become the country’s single most expensive infrastructure development.
The pipeline and two gas plants alone are expected to cost approximately US$2 billion, exceeding Guyana’s total national debt in 2018, which stood at roughly US$1.8 billion. Despite this, the government has continued to withhold critical project contracts and cost details from public scrutiny.
Sources close to the Wales project have revealed troubling elements within agreements signed between ExxonMobil and the Government of Guyana, contradicting assurances previously provided by both parties.
While ExxonMobil has publicly claimed that repayment for the pipeline will not begin until the project becomes operational, sources contend that associated costs are already being recovered through the company’s cost recovery mechanism under the PSA.
Additionally, Guyana reportedly signed a take-or-pay agreement with ExxonMobil to purchase gas from the Stabroek Block. Under such an arrangement, Guyana would still be required to pay for gas regardless of whether the country fully utilises it or whether the Wales project is completed on time.
Although Guyanese were initially told that the gas would be “free,” sources familiar with the negotiations said the agreement eventually evolved into a commercial Gas Sales Agreement (GSA), rather than a simple gas supply arrangement.
“Initially the government wanted a Gas Supply Agreement, given the political statements of ‘gas being free,’ which are untrue. Gas production falls under the PSA, and producing gas impacts the recovery of oil by the co-venturers, so ultimately they arrived at a Gas Sales Agreement,” sources explained.
The sources further indicated that Guyana has effectively agreed to purchase gas from ExxonMobil, despite questions being raised by stakeholders about whether the resources within the Stabroek Block should already belong to the nation
Meanwhile, the Government of Guyana is continuing discussions with neighbouring Suriname regarding a possible partnership for a second gas-to-energy project proposed for Berbice, Region Six.
At a recent press conference, President Irfaan Ali stressed the importance of collaboration with Suriname on the initiative.
“The conversation with Suriname is important to see how they will treat their gas. We’re working towards having our pipeline to see whether they will feed into our pipeline. If that happens, of course, the project goes up to a higher scale with massive additional opportunities,” President Ali stated.
Although the Wales project remains incomplete after several missed deadlines, the Ali administration has already signalled its intention to pursue a second gas-to-energy project before the end of the decade.
“We’re in the process of GTE Two because we are already projecting that the power needed from what is happening in the economy will definitely consume all of GTE One in its initial phase. So, we are already on that, the GTE Two project,” the President said.
Earlier this year, during the opening of the Energy Conference, President Ali also advocated for deeper collaboration with Suriname on the second project, suggesting that gas from both countries could support a larger regional initiative based in Berbice.
More recently, President of ExxonMobil Guyana Limited, Alistair Routledge announced that a second pipeline tied to the proposed Berbice project should be operational before the end of President Ali’s current term in 2030.
Although ExxonMobil completed the pipeline for the Wales project in December 2024, the broader project remains unfinished, with the government now targeting completion by the end of this year. Despite the first GTE project at Wales West Bank Demerara is still to be completed, after missing several deadlines, the Ali-administration had earlier signaled their intention to have a second GTE project before the end of the decade.
“We’re in the process of GTE Two, because you know we are already projecting that the power that will be needed from what is happening in the economy will definitely consume all of GTE One in its initial phase. So, we are already on that, the GTE Two project,” President Ali said.
Back in February, President Ali at the opening of the Energy Conference made the call to collaborate with Suriname on the second GTE project. The Guyanese Head-of-State had told attendees that discussions were underway for a joint initiative that could see gas from both countries being used for a larger-scale project in the ancient county.
Recently, ExxonMobil Guyana Limited (EMGL) president, Alistair Routledge announced that the second pipeline for the GTE project in Berbice should land before President Ali completes his second term in 2030. Since December 2024 EMGL completed the pipeline for the Wales GTE project; however, to date, the project is yet to be completed. The government is now eyeing the completion of the project by the end of this year.