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Business News of Friday, 12 August 2011

Source: .theafricareport

Ghana to borrow $800m from China to develop gas

Ghana will borrow $800 million from the state-owned China Development Bank to develop its natural gas infrastructure and the first gas could be expected by the end of 2012 or early 2013, the head of the Ghana National Gas Company said.

George Sipa-Adzah Yankey, who did not give any details on the loan, also said on Thursday that Ghana's gas production is expected to stabilise at around 120 million cubic feet per day. The deal, which has been signed off by the cabinet but needs parliamentary approval, comes after the West African state joined Africa's club of oil-producing nations in December last year when its Jubilee field came on line. A gas pipeline will link the offshore production site to a new processing plant in the Western regional of Bonwire as part of efforts to boost the country's energy supplies.

"The China Development Bank have agreed to finance the project and plans have reached advanced stage," Yankey said, adding that the project would take 18-20 months to complete. Yankey said the contract to build the infrastructure has been awarded to Houston-based INTECSEA, which is part of the WorleyParsons Group.

"We are expecting the infrastructure to be fully installed and first gas commissioned by end of 2012 or latest early 2013," he added. Most of the gas will fuel Ghana's gas-fired power plant at Aboadze but Ghana aims to export gas in the future, he said.

According to an agreement between the government and exploration companies, Ghana will receive all of the first 200 billion cubic feet of gas, after which the state will only receive its share.