Atuabo Free Port Project Ratified

Kofi Buah PixParliament has ratified a $600 million commercial agreement among the government of Ghana, Lonrho Ports Ghana Limited and Atuabo Free Port Company Limited for the development of the Ghana Oil and Gas Free Port Project.

The project is a public private partnership aimed at creating a specialised port dedicated to providing support to the supply chain in the oil and gas services sector.

It is expected to facilitate the transportation of logistics and support requirements in the petroleum industry and the entire region along the Gulf of Guinea.

The project will include the construction of an airstrip and a helipad to facilitate flight transportation, as well as other infrastructure like power generators, boreholes, office and home accommodations, a naval base, hydrocarbon fuel storage area and roads.

According to a report by the Joint Committee on Finance and Road and Transport, the port, when completed, would provide logistic supply base, offshore fabrication yard, and shipyard facilities to provide a base to undertake rig and ship repairs and other support services.

“The provision of facilities to support rig and ship repairs in Ghana are uniquely located to accommodate the sudden growth in deepwater exploration across the West African coastline with an expected increase in about 300 offshore supply vessels,” it said.

The chairman of the Finance Committee, James Avedzi, who moved the motion for the adoption of the committee’s report, said under the terms and conditions of the agreement, the project would be a private sector joint venture with the government, with total funding by the private developer.

“The committee was informed that the capital cost for the development is approximately US$600 million which will be funded under a non-recourse project finance,” he said.

When completed, Mr. Avedzi said the project would considerably reduce logistics costs to other oil and gas development in the Western Region.

He added that although 45 per cent interest in the port would be owned by Ghanaian institutions and the government, the country would further benefit from taxes and surface rent to be paid by companies that would operate from the free zone enclave at the port.

As part of the efforts by the government to ensure greater local participation in the development and implementation of the project, he said the project had been subjected to the local content and local participation regulations for the petroleum sector.

The Minister of Energy and Petroleum, Emmanuel Kofi Buah,  in a contribution to the motion, argued that though the country had two ports at Takoradi and Tema, the facilities were not built to support the requirements of the petroleum industry.

He noted that the project, when completed, would not only turn the country into an oil and gas hub within the West African sub-region but also create about 5,000 jobs.

“As Ghana joins the community of oil producing nations, it will be vital to have facilities such as a dedicated port for oil and gas operations, from storage, fabrications, and maintenance work, all at one location,” he said.

Minority Spokesperson on Roads and Transport, Kofi Owusu Aduomi described the project as very controversial, raising concerns with Lornho’s capacity to build such a port, and indicated that the free port constructed by the company in Equatorial Guinea raised concerns about its capacity to deliver the project.

Mr. Aduomi argued that the Takoradi Port, after the House had approved a loan of £ 194 million to expand its operations, was positioning itself to support the hydro-carbon industry and was currently restructuring and expanding its existing facilities to support the industry.

“The committee visited the Takoradi Port and we are all impressed about the expansion works to support oil and gas,” he said and suggested that the port should rather be developed to meet the demands of the petroleum industry.

After the arguments, the agreement was passed by majority voice vote, as the Minority side, which expressed reservations about the project, abstained.    By Yaw Kyei

 

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