GO
Loading...

INTERVIEW-West Africa eyes regional gas company as power needs grow

* Regional economic pillars Ghana, Ivory Coast facing gas shortages

* Want to pool resources to import liquefied natural gas

* Seeking to partner with LNG exporters Nigeria and Equatorial Guinea

ABIDJAN, Jan 30 (Reuters) - Ivory Coast and Ghana are planning talks with liquefied natural gas exporters Nigeria and Equatorial Guinea to create a regional gas company to address a looming power crunch, Ivory Coast's energy minister said.

West Africa is one of the world's fastest growing regions with Nigeria leading the way, followed at a distance by Ghana and Ivory Coast, but difficulties for the two neighbours in meeting growing demands for power threaten economic expansion.

In Ghana, an offshore gas project has been delayed and the severing of a pipeline bringing natural gas from Nigeria caused an energy crisis in 2013 with frequent power cuts that the government said hampered economic growth.

Ivory Coast is investing heavily in its neglected energy infrastructure as part of an economic revival that follows years of political unrest. It currently exports power to Ghana, Burkina Faso, Togo, Mali and plans to interconnect with Liberia, Sierra Leone and Guinea.

But with electricity consumption growing by some 15 percent annually and 70 percent of its power generated by gas-fired plants, local natural gas output will soon be unable to keep up.

"Presently we do not have enough gas reserves to meet our future electricity demand ... I think Ghana is in the same situation," Ivory Coast's Energy and Hydrocarbons Minister Adama Toungara told Reuters late on Wednesday.

Toungara said he and his Ghanaian counterpart had already discussed co-financing a shared regasification terminal to warm the super-cooled gas from tankers and had approached Equatorial Guinea and Nigeria to supply the LNG.

"If you import liquefied natural gas, you need to regasify that gas. Ghana will do the same thing if they go that way," Toungara said.

"The minister ... from Ghana and I thought we should put our efforts together and our finances to cut costs," he said.

The project indicates that regional economies are mulling local gas supplies in addition to importing from more distant Middle East producers such as Qatar.

CONVINCING BROTHERS

Officials from the four nations are due to meet in Ghana next month to discuss the creation of what Toungara said would be a new regional gas company that could supplement supplies from countries such as Qatar.

"We're trying to convince our Nigerian brothers to join and Equatorial Guinea to join. I think the minister Gabriel Obiang (of Equatorial Guinea) is agreeable to setting up such a company," Toungara said.

An initial study published last year for an Ivorian regasification project estimated that the country will require at least 37 billion cubic feet per year of LNG.

Ivory Coast has been in negotiations to secure LNG supplies from Qatar, the world's largest exporter, as part of a government-to-government agreement. However, Toungara said a deal had not yet been finalised.

"For questions of security and national defence you really need to diversify your supply of petroleum products. The setting up of a regional gas company does not exclude looking at other regions," he said.

BG Group signed an agreement with tiny Equatorial Guinea in 2004 to purchase 3.4 million tonnes of LNG each year until 2024 from Equatorial Guinea LNG, a joint venture led by Houston-based Marathon Oil.

But Equatorial Guinea's energy minister said in an interview with Reuters last year the country may seek to revise some aspects of the deal as it moves to export more gas to Africa.

(Additional reporting by Matthew Mpoke Bigg in Accra; Editing by Matthew Mpoke Bigg and David Evans)