China Harbour Engineering Co. Ltd. (CHEC) has inked a deal with Tema LNG Terminal Company to construct an LNG Terminal, which is designed to convert LNG into gas that’s ready for burning, in Tema, Ghana.
The CHEC, a Chinese state-owned firm, will build the terminal as sub-Saharan Africa’s first liquefied natural gas (LNG) regasification terminal at the Tema port in southeastern Ghana, with the construction expected to cost in excess of $350 million and be completed in 18 months, according to reports.
The project is expected to generate about 1,600 jobs, and when commissioned, will provide up to 2 million tonnes of natural gas every year, ensuring nearly 30% of Ghana’s total power generation capacity.
Ghanaian President Akufo-Addo was present at the signing ceremony on Sept. 2, saying that the Tema LNG Terminal project demonstrated the efforts the government made over the last 19 months to encourage participation of private enterprises in the growth of the national economy.
“If we are going to succeed in rapidly pushing the industrial development of our country, the supply of gas, which will mean even more affordable rates of power, is now a matter of very great importance for us,” Akufo-Addo said.
Although the inked LNG deal will help to enhance Ghana’s domestic energy supply instead of China’s, it is one of several LNG projects Chinese firms are operating abroad, largely in order to boost China’s supply. In July, the China National Offshore Oil Corp. announced to invest an additional $3 billion in exploiting Nigeria’s offshore oil and gas reserves. Chinese companies also reached major deals to develop energy reserves in the U.S. states of Alaska and West Virginia in late 2017.
China has made great efforts to boost the consumption of LNG in recent years as it strives to clean up the air suffering heavy pollution due to its current energy mix where coal accounts for too much.
Last year, China saw the total consumption of LNG jump 46 percent to 38.13 million tonnes, overtaking South Korea to become the world’s second largest LNG importer after Japan. The rise corresponds to the nation’s increased gas demand in the first half of this year, which went up 17.5 percent to 134.8 billion cubic meters from a year earlier.
The LNG terminal deal was reached just the day before the opening of the Forum on China-Africa Cooperation summit held in Beijing, where Chinese President Xi Jinping pledged to offer another $60 billion in financing for Africa’s development.