Expiry of gas supply agreement from Ghana's Jubilee field threatens electricity prices - Energy

Gas supplies from the Jubilee field in Ghana are of particular importance, to maintain electricity prices at appropriate levels, but those supplies are threatened with the end of an agreement concluded by the previous government to control the matter.

The previous government of John Kufuor had conducted negotiations on an agreement that guarantees the continuation of free gas flows, which contributed to generating electricity at low prices, but this agreement is scheduled to expire at the end of this year.

An official at the Ghana National Oil Authority tried to reassure those concerned, noting that negotiations are currently underway on new controls on the prices of gas produced from the Jubilee field in Ghana, to maintain electricity prices at appropriate levels.

Gas and electricity price agreement

The National Oil Authority has announced that the agreement for free supplies of gas from the Jubilee field in Ghana is due to expire at the end of 2022, according to the Ghana Web newspaper.

Jubilee field in Ghana
An employee of Tullow Oil Company in Jubilee field in Ghana – Photo from Ghana Web

The authority explained that the prices of gas supplies from the Jubilee field will maintain their low levels, but they will not be the lowest at all, which is what the authority has taken into account, during its assessment of the new gas prices.

With regard to the reflection of this step and the change in gas price estimates on electricity prices, energy expert Kwame Gantoah downplayed the results of the termination of the free gas agreement from the Jubilee field in Ghana and its relationship to the increase in electricity prices.

He pointed out that the National Oil Authority officials are currently negotiating about new gas prices from the Jubilee field in Ghana, revealing that the negotiations are revolving around a specific low price.

Gantoah stressed that the Public Utilities Regulatory Commission takes it upon itself to monitor prices to ensure that no additional burdens are placed on consumers.

Information about the Jubilee field in Ghana

The Jubilee field is located 60 kilometers from the coast of the Western Region, and is operated by Tullow Oil – based in the United Kingdom – with a 35.48% stake, according to the company’s website.

Jubilee field in Ghana
The Jubilee field in Ghana – Image courtesy of the website of operator Tullow Oil

Tolo Oil participated in the American Cosmos Company with 24.08%, Occidental Company by the same percentage, Ghana National Oil Company with 13.64%, and South African Petrosa Company by 2.73%.

The field was discovered in 2007, through the exploration wells “Mahogani-1” and “Hideo-1”, and became operational in December 2010, after approving the first phase of the development plan using a floating storage and offloading facility with a capacity of up to 120,000 barrels. Daily.

At the beginning of this year, Tullow Oil sought to provide ways to protect its offshore fields, including the Jubilee field in Ghana, by signing a memorandum of understanding with the Navy in Accra, especially with the project’s partners investing approximately $23.5 million.

The Protection Partnership entered into force at the beginning of this month, and is scheduled to last for a period of 5 years, ending in December 2026.

electricity in Ghana

Gas production from Ghana’s Jubilee field is an important source of electricity generation, but Accra is expanding with other sources in an effort to ensure supply security and ability to meet local demand.

At the beginning of this month, Ghana launched a new power plant whose work is to produce electricity from waste – especially solid – with a capacity of 400 kilowatts. This station allows Ghana to increase its dependence on waste (at an average of 7.15 million tons per year) in generating electricity.

In addition to the waste power plant, Ghana aims to increase the share of renewable energy sources in the electricity mix to 10% by 2030.

Currently, the West African country depends on meeting 70% of its electricity needs through a plant that relies on natural gas.

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