LNG infrastructure company Ecow-Gas to develop more facilities in West Africa

A newly created Netherlands-based infrastructure development company is planning to build and operate a number of new LNG facilities in countries across West Africa in order to improve market penetration for the fuel in the region.

Ecow-Gas -- an affiliate of the Tema LNG Terminal Company (TLTC) that owns the soon-to-be-commissioned LNG import facility in Ghana -- has won exclusive rights to build and operate storage and regasification facilities in Liberia and Sierra Leone, S&P Global Platts has learned.

The Ghana terminal will act as a regional LNG hub, with shippers able to bring small-scale LNG into Liberia and Sierra Leone by reloading from the Tema facility.

This improves the overall economics of small-scale LNG in the region as the terminal can reload any amount of LNG from 7,000 cu m to 30,000 cu m, ensuring that supply to smaller regional markets can be flexible to their demand.

The completion of the construction of the Tema LNG terminal will create an LNG hub with a storage capacity in excess of 180,000 cu m to serve the regional market.

It means that the need for large amounts of capital expenditure and credit costs to introduce LNG into new countries has been removed. "Countries can share risk and absorb capacity as demand fluctuates," a source with knowledge of the deal said.

In addition, inland markets such as Burkina Faso could take LNG by truck given that the Ghana facility also has the ability to load LNG directly onto trucks.

Ecow-Gas declined to comment when contacted by S&P Global Platts.

Power appetite

The West African region has a large extractive industry with an appetite for power that is currently mainly served by distillate fuels at high prices.

There is a requirement of an estimated 1 million mt/year of LNG across the region for power generation and displacement of distillates in the extractive sector.

This is expected to grow to about 1.8 million mt/year over the next decade as countries in the region invest in further generation and the transition away from heavier fuels continues.

"The construction of this network of LNG storage and transfer facilities will facilitate the deployment and use of gas to spur the economic development of countries throughout the ECOWAS region," sources with knowledge of the company's efforts in the region said.

ECOWAS's 15 member states comprise Benin, Burkina Faso, Cabo Verde, Cote d'Ivoire, the Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo.