In Ghana, Russian And Chinese Business Interests Align

In Ghana, Russian And Chinese Business Interests Align
Image by SteKrueBe
Containerterminal in Tema, Ghana

With Putin announcing a Russia-Africa economic summit set for Sochi in October, there are growing signs of Russia’s influence in Africa. Such forums have proved the venue for major announcements of Russian policy in the past, especially on the continent where Russia’s policy is often aligning with those of China.

Indeed the 2018 St. Petersburg Economic Forum served as a venue to announce an agreement between Rosneft and the Ghana National Petroleum Corporation (GNPC). Under the terms of the agreement, Rosneft will deliver 1.7 million tons of LNG to Ghana through the port of Tema each year for 12 years. The tonnage aside, the deal marks an important step in the Russian Federation’s growing relationship with Africa.

“It’s very interesting that this deal was announced not in Ghana, but in Russia,” says Barbara M.E. Andoh a research associate at the Imani Center for Policy and Education, “Normally such deals have to be passed by the cabinet and the parliament, so the process is more transparent.” The final status of the agreement is unclear but, Andoh says the deal has attracted a great deal of attention.

At the time of signing, Rosneft CEO Igor Sechin said the agreement was about more than just LNG and would “open up exploration, production and trading possibilities for the company,” in Ghana and West Africa.

Due process aside, the announcement suggested that Rosneft had emerged successfully over competing bids. The previous government of Ghana under President John Mahama signed three LNG import deals with Quantum Power Ghana, West African Gas Limited and Kaheel. However, wether Ghana needs all of this LNG, or indeed the gas volumes that Russia hopes to export to the country, remains unclear

“Ghana is likely to have a ‘gas-glut’ in the mid-term,” says Andoh”; our producing oilfields such as Jubilee, 10, and SGN, all produce gas as well. There is a need to project demand and project supply; there is a fear an oversupply of gas.”

Russia plans to develop Ghana’s own natural gas capacity. “We are looking to develop an IPP, Independent Power Project, which will take gas that would normally be burned as flare gas and recapture and use it on shore for power generation,” said an official from Ghana Infrastructure Investment Fund.

Ghana’s first port was developed by British colonial authorities at Takoradi, where favorable geography blessed Ghana with one of the best natural ports in West Africa. An off-dock terminal with a capacity of 17,000 TEU opened in 2017. The GPA also plans to develop a new port in Keta a small isthmus in Eastern Ghana (close to the border with Togo) that will include both a commercial port and a marina for pleasure boats.

However it is Tema, a bustling port to the east of the capital city of Accra, that emerged as the main economic port soon after independence. It is the third busiest in West Africa (After Lagos, Nigeria and the twin ports of Lome, Togo) . Until recently the port was still home to the Meridian Rock, a modest offshore boulder that was marketed to tourists as sitting exactly on Latitude Zero — the Greenwich Meridian. 

The rock which sat in front of an aged resort where Queen Elizabeth II once stayed was said to have spiritual and cultural significance for Ghanaians of Ga heritage. 

A recent trip to Tema by the author failed to locate the rock, and the resort is long since gone. Instead, four new piers are being added to the harbour in part of a port expansion project that is projected to cost as much as $2 Billion.

China Harbour Engineering Company is working on the Floating Storage Regasification Unit (FSRU) necessary for the LNG project at Tema. The project will reportedly provide 1,600 jobs to Ghana. Last year, another FSRU that had been tapped for installation off Ghana was quietly acquired by a Spanish company for use as an LNG tanker.

When completed, the facility built by the China Harbour Engineering Company will be able to supply LNG sufficient for 30% of Ghana’s energy needs. Rosneft is one of the investors behind the project.

The LNG project is not the only energy infrastructure build in Ghana in recent years. In 2012 Ministry of Energy & Petroleum signed an agreement with ROSATOM for the development of Ghana’s nuclear industry. In June 2015 a similar agreement was signed between Ghana and Russia. However, here again, the Chinese and Russian efforts are supporting one another. This year a new government-owned special purpose vehicle was created to further develop Ghana’s nuclear industry. The new company has already signed cooperation agreements with both China and Russia. Ghana is emerging as yet another example of great power cooperation in the 21st century.

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