The Ghana National Gas Company (Ghana Gas) has signed a deal with Chinese multinational, Yantai Jereh Group, for the construction of an onshore 278 km natural gas pipeline from the Aboadze enclave in the Western Region to the power enclaves at Tema in the Greater Accra Region.
The project agreement, dated April 11, 2017, will see the implementation of a previous agreement signed last year between the two companies.
The latest deal will enable immediate commencement of site works such as topographical/geotechnical site surveys and front-end engineering designs (FEED), which are already underway, as well as on-site civil construction activities which will commence within the next ten days.
The financial structure of the project includes a 15-year Build Operate and Transfer (BOT) model whereby the Yantai Jereh Group, along with their investment partners, will fully pre-finance all construction activities related to the project.
Ghana government will not bear any upfront cost, according to a press release from the two companies.
“The entire investment made by the Chinese conglomerate will be recouped by charging transportation fees based on volumes of gas being moved through the pipeline over a period of 15 years after which ownership of the entire infrastructure will be transferred to the Ghanaian government completely free of any recurring charges or financial encumbrances,” the press statement said.