Tullow Oil has begun engagement with the Ghana government on an urgent gas sales contract.
This is because foundation gas volumes which is free gas issued to Ghana from the inception of the Jubilee contract will expire soon.
Based on its current production forecast, Tullow, expects the volume of 200 billion cubic feet of foundation gas to deplete by the end of the year.
But the oil and gas giant has begun engagements with the government of Ghana for an agreement which will ensure there is no interruption in the supply of gas.
No time to waste
“The urgency level is high and it should be our number one priority on all sides of this discussion to ensure that there is an agreement in place”, Al-Monthiry said when he spoke to Joy Business’ Daryl Kwawu.
He explained the agreement will ensure the security of gas supply for power generation and ease the cost burden on the Ghanaian consumer, from an individual perspective, private or public sectors.
Russia’s invasion of Ukraine has affected global gas prices and it has become really important for nations to secure their future sources of power. Meantime, as the momentum for energy transition picks up, gas is considered globally as a transition fuel to help reduce emissions.
Tullow says, based on these factors, its priority is to ensure there is continued support for Ghana through gas volumes delivered.
“Average price of gas in Ghana today is somewhere in $6.5 per million British thermal units, which is actually quite expensive, Wissam Al-Monthiry, Managing Director of Tullow Ghana noted.
Tullow is certain of delivering a minimum of 200,000,000 standard cubic feet of gas a day between now and the end of its license period in 2036 for Jubilee and TEN.
This gas, Al-Monthiry, says will represent by far the lowest cost gas available to the country of Ghana from any alternative sources, domestic or foreign.
“We’re currently engaging. We are working really hard to ensure that we get agreements in place before any of the deadlines….I can’t commit to a timeline because it’s not only in my hands or in our hands, but I will stress the urgency”, he added.
New gas reserves
Tullow Ghana earlier this year confirmed the discovery of a new gas reserve, estimated offshore Cape Three Points in the Western Region.
The non-associated gas reserve is located within the Tweneboa, Enyenra, Ntomme (TEN) and the Jubilee fields.
“So in terms of our view of volumes, we see between Jubilee and TEN, about two trillion cubic feet of gas. Now that’s not proven reserves, those are numbers based on our views and understanding of the reservoirs”, the Tullow boss said.
Tullow says it needs to begin drilling wells on the non-associated side to get those numbers proven.
“But we feel very confident based on what we’ve seen so far, what we need now is an agreement to allow the capital investment to prove up those reserves. That’s why there’s a lot of urgency”, Al-Monthiry concluded.
Source: Daryl Kwawu