ACCRA, The Ghana Gas Company, a State-owned company which has the mandate to operate the country’s gas infrastructure, has signed a contract with the Yantai Jereh group, a Chinese multinational oil fields services company, to construct an onshore natural gas pipeline infrastructure in the country.

Ghana Gas said in a statement Monday that the 278-kilometre pipeline would begin at the the Takoradi Aboadze enclave in Western Region (Province), about 180 kilometres southwest of here, to the power enclaves of Tema in the Greater Accra Region.

The 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 in the next few days.

The statement was silent on the total cost of the project but said the financial structure included an innovative 15-year build-operate-transfer (BOT) model in which the Yantai Jereh group, along with their investment partners, would fully pre-finance all construction activities related to the project with absolutely no upfront cost to the Ghanaian government.

The entire investment by the Chinese conglomerate would be recouped 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 would be transferred to the Ghanaian government completely free of any recurring charge or financial encumbrance.

The proposed gas transportation charge of approximately 1.56 US dollars per MMBtu (million British Thermal Units, a standard unit of measurement used to denote the amount of heat energy in fuels and the ability of appliances) is a fraction of the 4.05 USD per MMBtu initially charged by the offshore West African Pipeline Company (WAPCO) for similar natural gas transportation services.

Other advantages of the onshore pipeline would enable the secure and transportation of natural gas energy resources generated from oil fields located in the Western Region to the Eastern part of the country whilst traversing multiple Regions along the coastline of Ghana, the statement added.

Multiple regional natural gas distribution stations will be constructed between the two major load centers of Takoradi and Accra with stations being located in Takoradi, Cape Coast, Winneba, Nsawam, and Tema, which are earmarked for phase one as well as a potential station in the Volta Region in phase two of the project.