Government gets US$700 million guarantee for Sankofa project

The government has signed the security package agreement with the World Bank (WB) amounting to US$700 million for the Offshore Cape Three Points Project Known as the Sankofa Gye Nyame Gas Project, meeting the key final deliverable under the execution of the project.

It involves the International Development Association (IDA) payment guarantee of US $500 million and the International Bank for Reconstruction and Development enclave guarantee of US $200 million.

The agreements under the Partial Risk Guarantee include  the  International Development  Association  (IDA) Indemnity Agreement signed  by the Minister of Finance, Seth Terkper and the WB Country Director, Henry Kerali, IDA Project Agreement signed by the WB Country Director and Eni and Vitol Managing Directors, Fabio Cavanni and Jonathan Norton respectively,

The rest are the IDA Support Agreement signed by the Ghana National Petroleum Corporation Chief Executive Officer, Alex Mould and Eni and Vitol Managing Directors, IDA Cooperation Agreement signed between GNPC CEO and WB Country Director and Reimbursement and Credit Agreement signed between GNPC and HSBC and SCB representatives.

The  US $7.9 billion Sankofa Gye Nyame project is Ghana’s third major upstream asset after the world-class Jubilee field and the Tweneboa-Enyera-Ntomme (TEN) producing fields, located 60 kilometre offshore Takoradi.

It is Ghana’s first gas-to-power project with the capacity to supply 180 million standard cubic feet of natural gas enough to generate up to 1,100 megawatts of power.

The Sankofa field holds estimated proven hydrocarbon reserves of 204 million barrels of oil and 1.1 trillion standard cubic feet of natural gas, is operated by Eni which holds 47.2 per cent in the block, Vitol 37.8 per cent and GNPC which holds 15 per cent carried interest and five per cent additional participating interest.

Speaking at the signing ceremony in Accra, Mr. Terkper said as part of the security arrangements supporting GNPC’s payment obligations under the Gas Suppliers Agreement, GNPC was required to raise a Letter of Credit (LC) from an A-rated International Financial Institution in an amount of US $500 million.

“To this end, the Ministry of Finance, GNPC, the LC Banks, the Private Gas Supplies and the World Bank (IDA) negotiated the various agreements which will be signed today,” he said.

Mr. Terkper said the Sankofa project was a landmark project, which together with Jubilee and TEN, would contribute significantly to meeting Ghana’s energy security needs.

Mr. Kerali  said the WB was proud to be providing guarantee for the Sankofa Gye Nyame project, saying it was one of the biggest guarantee to be provided by his outfit in Sub-Saharan Africa for the past 20 years.

Mr. Mould said the project was on course and would be completed within schedule, saying oil production would come on-stream in August 2017 and gas production projected for February 2018.

He said the FPSO vessel for the Sankofa Gye Nyame Project  was about 80 per cent completed, stressing that the project would provide clean energy to address the country’s energy problem and accelerate the industrialisation of the country.

Mr. Cavanni said his outfit has worked strenuously for the past five years to ensure the project was completed on schedule and was proud to be a critical partner of the country’s energy sector.

By Kingsley Asare

 

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