Daniel Nonor
Ghana's planned $6 billion 200,000 barrels per day New Alpha refinery has secured a 20,000 barrels-per-day take-off deal in Nigeria, and is also looking to China for funds, a senior executive said on Monday.
Expected to come on stream by 2015, the new refinery, which would be the biggest in West Africa, was designed to serve the local Ghanaian market, and also target the continent's top oil producer, where attacks and lack of infrastructure had severely crimped the Nigerian crude and refined oil products output.
"We have concluded an off-take agreement with Ross International Nigeria Limited, based at Port Harcourt, for a 10 percent of the finished product, which is 20,000 barrels per day," Merlyn Julie, Executive Chairman of New Alpha Refinery Ghana Limited, told Reuters in an interview.
"We are looking at a further off-take agreement with the River State House of Assembly government, and a US-based oil company for an additional 20 percent or 40,000 bpd," Julie said.
He did not name the independent US-based oil company, but said it had links with Ross International in Houston, and expected a deal to be concluded within the next two months.
Many sub-Saharan refineries are small, and analysts believe only a tiny proportion of the planned refinery projects for the region will be on stream by 2015, because of a lack of foreign funding. The region imports about 1.4 million bpd of refined products, excluding fuel oil downstream, Afican consultancy CITAC said.
"There is a huge constraint on available cash flows to projects like this, although we are eliminating a lot of the risks by vigorously pursuing off-take agreements to confirm the viability of the project," Julie said.
"We are also looking to the Far East, specifically China's national companies involved in this sector."
He said New Alpha was also in talks with Nigeria's federal government for them to supply fuel feedstock - possibly Bonny Light crude - to the refinery, in exchange for refined products.
"The exact volume hasn't been ascertained yet... the exact mix of crude blends will depend on the configuration of the refinery," Julie said of the refinery which was being designed to ramp up to 400,000 bpd if necessary.
Julie said Ghana Oil Company (Goil) also expressed an interest to take a minimum of 30 percent, or 60,000 bpd, of the finished product.
Ghana's 45,000 bpd Tema Oil Refinery, the country's only refining plant, was currently running at 80 percent of its capacity, due to financial problems.
A pre-feasibility study for the new project, which consists of the refinery, a terminal with loading and discharging facilities, and a tank farm with pipeline infrastructure, was expected at the end of October, Julie said.
The oil precinct will be sited in Ghana's Western Region, at the coastal port town of Takoradi, in close proximity to the Jubilee offshore oilfields.
Ghana expects oil to generate an average annual $800 million revenue for state coffers from next year, as cash from its Tullow Oil Jubilee field starts pouring in.
"The pipelines that will be linking the wells in the Jubilee Field to the mainland will be at Takoradi," said Julie.
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