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Last Updated: August 2016

Overview


Map of Ghana
Map of Ghana
  • Ghana is a small oil and natural gas producer in West Africa. Oil and natural gas production are both expected to increase within the next five years with the start of new offshore projects. Ghana exports its crude oil production to international markets, while the country’s natural gas production is used to fuel its domestic power plants.
  • Many Ghanaians rely on traditional biomass and waste, particularly firewood and charcoal, for household cooking and heating. Nevertheless, the share of biomass in Ghana’s energy mix has steadily declined in recent years due to rising fossil fuel consumption. Biomass comprised more than 50% of the country’s primary energy supply in 2009, falling to about 38% in 2015, according to Ghana’s National Energy Statistics.

Petroleum and other liquids

  • Ghana’s energy sector has expanded considerably after the discovery of the Jubilee oil field in 2007, which now produces light sweet crude oil. The field came online in 2010, and production in Ghana has since increased from almost 9,000 barrels per day (b/d) in 2010 to almost 107,000 b/d in 2015, according to government estimates. Technical challenges at the Jubilee field have prevented it from reaching its expected production plateau of 120,000 b/d. In July 2015, Jubilee’s production was almost halved because of problems with gas compression systems on its Kwame Nkrumah FPSO (floating production, storage, and offloading vessel). Between March and May of 2016, a technical issue with the FPSO’s turret again restricted the field’s operations.
  • Ghana’s only other oil producing field besides Jubilee is the offshore Saltpond field, which produced just 110 b/d in 2015, according to Ghana’s National Energy Statistics. Because of Saltpond’s low production levels, Ghana National Petroleum Commission (GNPC) plans to decommission the field in 2016. In recent years, questions have also arisen as to whether Saltpond’s storage facility was used to store stolen Nigerian crude oil before export to international markets.
  • Tullow Oil, the operator of the Jubilee field, is also developing the offshore Tweneboa, Enyenra, and Ntomme (TEN) project. The TEN project is expected to come online in August 2016 and eventually reach a peak output of 80,000 b/d of crude oil and 50 million cubic feet per day (MMcf/d) of natural gas. Development of TEN is the largest new project in Africa in 2016.
  • Ghana has one oil refinery, the Tema refinery (TOR), with a design capacity of 45,000 b/d, according to the Oil & Gas Journal. Operations at the refinery have been repeatedly halted over the past few years because of old equipment and the lack of funds to purchase crude oil for processing. These issues have forced TOR to run below capacity, prompting Ghana to import most of its refined petroleum products and export the majority of its crude supplies. In 2015, Ghana expressed interest in a joint venture deal with PetroSaudi International to help finance the refinery’s revitalization project. As of 2016, TOR has restructured its debts, and it is unclear whether the deal will proceed.

Natural gas

  • Ghana started full commercial natural gas production at the Jubilee field in April 2015. Natural gas is sent via pipeline from the Kwame Nkrumah FPSO to the onshore Atuabo gas processing facility, though technical issues with the FPSO in both 2015 and 2016 have reduced natural gas output. The natural gas is being used for domestic power generation.
  • Ghana is planning to expand its natural gas production with the start of the TEN associated gas project and non-associated gas fields at the Offshore Cape Three Point (OCTP), which includes the Sankofa and Gye Nyame gas fields. In early 2015, the Italy-based Eni (the project’s operator), Switzerland-based Vitol, and the Ghanaian government signed an agreement to proceed with plans to develop the OCTP project, which is estimated to contain 1.5 trillion cubic feet of gas-in-place and about 500 million barrels of oil-in-place. First oil production is expected in 2017, followed by natural gas production in 2018. The natural gas will supply existing and new power plants in Ghana, helping to improve electricity access in rural areas. The oil will be exported, according to press releases from Eni and Vitol.
  • Ghana imported 21 billion cubic feet of dry natural gas in 2014, according to Cedigaz data. Ghana imports natural gas via the West African Gas Pipeline (WAGP), which runs east to west from Nigeria to Ghana. WAGP was shut down from August 2012 to July 2013 for repairs following damage to the Togolese section of the pipeline. Gas flows through the pipeline have decreased since 2011 and remain unreliable, forcing Ghana to use heavy oil to supply its dual-fueled power plants. In June 2016, the West African Gas Pipeline Company (WAPCO) announced the suspension of gas flow to Ghana from Nigeria due to around $180 million of unpaid bills.
  • Ghana’s energy ministry acquired a floating storage and regasification unit (FSRU), the Golar Tundra, to import liquefied natural gas (LNG) and to meet power generation demand in the medium to long term. According to Ecobank, Ghana will need more than 800 MMcf/d of natural gas by 2017 for power generation. This supply deficit, combined with unreliable supply from the country’s pipelines, has prompted the government to develop LNG facilities. Ghana’s first imports of LNG are scheduled for the beginning of 2017.

Electricity

  • A single state-operated company, the Electricity Company of Ghana (ECG), oversees the country’s power generation and distribution.
  • Ghana had almost 3.7 megawatts (MW) of installed electricity capacity, as of the end of 2015, of which roughly 43% is from hydroelectricity plants, 56% from oil and natural gas plants, and less than 1% from solar, according to Ghana’s National Energy Statistics. Ghana generated almost 11,500 Gigawatt hours (GWh) of electricity in 2015.
  • Ghana has one of the highest electrification rates in sub-Saharan Africa, with 72% of people having access to electricity. Nonetheless, similar to most developing countries, there is a large disparity between electricity access in Ghana’s urban areas (92%) versus rural areas (50%).
  • Ghana experiences cyclical electricity shortages from irregular WAGP gas supplies as well as low water levels at the Akosombo hydroelectric complex, which currently supplies 36% of the country’s total power supply. In recent years, Ghana has experienced more frequent mass power outages due to increasing demand from a growing urban population. The drop in Ghana’s Gross Domestic Product (GDP) growth from 8.8% in 2012 to around 3.7% in 2015 can be partially attributed to inadequate grid power for the industrial sector, according to Ghana’s Energy Commission.