Energy Consultant, Dr Yussif Sulemana has indicated that the liquified natural gas-to-power project will reduce the cost of electric production in the country by up to 30 percent.
Ghana is set to open sub-Saharan Africa’s first liquefied natural gas-to-power project as it moves to position itself as a hub for the cleaner and cheaper fuel in the region.
Dr Sulemana in an interview with Citi Business News said electricity consumers should expect some reduction in tariffs with the commencement of the project.
“We are saying that if we are going to use LNG to generate power, and crude oil stays at 50 dollars per barrel, we could save up to 30 percent. For example, if the end-user pays an amount, you can just calculate 30 percent of that amount in terms of quantum reduction. Because the figure isn’t fixed, I can’t tell you what figure it’s going to be. But we can estimate that, per the cost of LNG as compared to heavy based fuel such as crude oil, we can estimate about 25-30 percent reduction. Again, that’s going to be based on power availability, power affordability and then the dependability. That is what is guaranteed in most jurisdictions when LNG is used to generate power. I can also tell you that cost is also based on availability and dependability, so if many sources of power generation points are there, and they are competitive people will definitely charge lower.
Tema LNG Terminal Company last week Wednesday received the floating regasification unit from China, paving the way for the supply of 1.7 million tons of natural gas per year for power generation hopefully by March this year.
The project which began two years ago is estimated at 350 million dollars.
According to the International Group of Liquefied Natural Gas Importers, on a lifecycle basis, LNG emits around half the greenhouse gas emissions that coal does when burnt to generate electricity. Also, when compared to a typical new coal plant, natural gas emits 50 to 60% less carbon dioxide when combusted in a new efficient natural gas power plant.