The government of Ghana under the better for Ghana agenda BOST has been mandated by the Ministry of Energy to quickly consider the installation of LPG storage to augment the existing private sector
LPG Satellite Depots
Plans are underway to build three LPG depots at Savelugu (in the North), Kumasi ( in the middle) and Mami Water (in the east) to supplement the existing LPG storage depot in Tema (in the south) and the proposed BOST depot at Pumpuni (in the west). The three depots are planned to be completed in 2012 and altogether, these depots should move the supply constraints currently facing the country.
BOST Petroleum Terminal
An application has been submitted to the Ministry of Finance for BOST to benefit from the US$ 3 billion Chinese loan to build the BOST Petroleum Terminal at Pumpuni. A feasibility study for the project has been prepared and the major outstanding issues include the Restructuring ofBOST into a holding company, the Financial Restructuring of the company, an Owner’s Engineer and the finalization of the acquisition of the Pumpuni Land.
Other companies and institutions including the Canadian Commercial Corporation(CCC) continue to express interest in the project which is expected to be an export-oriented, world class terminal.
BOST should continue to work towards the selection of an able partner for the operation and marketing of the terminal as it would face very stiff competition from both local and well- established world-class oil marketers.
The commencement of oil production in Ghana has brought about changes in the mandate of state institutions and state-owned companies operating in the energy sector, among them, the Bulk Oil Storage and Transportation Company Limited, BOST. From its original mandate of managing Ghana’s strategic stocks of petroleum products, BOST is now expected to join other sister energy sector institutions to spearhead the country’s gas based industrialization. Over the initial phase of oil production, Ghana expects to produce about 120,000 barrels a day, then, the subsequent phase starting form 2014 will double the output to almost 250,000 barrels a day. All of that oil will come from just one field, out of several to be developed. BOST’s role in the big picture of transformation Ghana’s economy through the emerging oil industry is to transport the natural gas associated with the off-shore oil and gas production once the gas is piped on-shore. So bright is the promise of Ghana’s gas fortune that since commercial oil production started in December 2010, new discoveries of natural gas have been made even as further exploration activities continue. With increasing prospects of more discoveries, industry experts project that the volume of oil to be produced in Ghana could go up to between 500,000 and 1 million barrels a day in the near future. The sheer size of the potential gas reserves of the country is better appreciated when one considers that there is ten times much natural gas crude oil in the Jubilee field, and early indications are that the newly discovered Tweneboa field holds even a greater proportion of gas to oil. It is this massive volume of natural gas that the country is counting on to transform its economy from the current lower end middle income status into an economic giant in Africa and the world. “We are looking at both associated and non-associated gas. That can become a major driver of the economy. We see the gas powering our thermal plants, supplying industry and households with low cost electricity and further downstream, we can see a petrochemical industry developing.
In pursuit of its expanded mandate as a major player in the secondary gas sector, The Bulk Oil Storage and Transportation Company Ltd (BOST) is acquiring over 300 acres of land near Takoradi to serve as the hub for the transportation of natural gas and liquefied petroleum gas (LPG) from Ghana’s oil fields to support a renewed gas-based industrialization drive. The Bulk Oil Storage and Transportation (BOST) Company is completing feasibility studies to construct a modern gas transmission system to serve Ghana and its neighboring countries in support of its additional mandate to become the national transporter of natural gas. To start with, BOST will construct a gas terminal at Pumpuni, near Takoradi in the Western Region, and also develop the first phase of the Western Corridor Transmission System, all estimated to cost US $600 million, to start this year and end in 2013. The government will solely fund the project through bilateral arrangements. The multi-million dollar project will create thousands of jobs for Ghanaians and give meaning to the local content and local participation in the petroleum industry policy which aims at indigenizing the oil and gas industry. Right from the blast, the monumental project will generate jobs for artisans, metal fabricators, welders, carpenters, caterers, drivers, engineers, among others, Some of the major industries in the Western and Central Regions that can breathe a sigh of relief are the Abosso Glass Factory, the integrated alumina processing industry of which Sekondi will now be the hub, the Bokazo and Saltpond ceramic factories and the Nsuta manganese processing project. The gas processing plant is expected to produce dry gas for power generation, minerals processing and petrochemicals; natural gas liquids, as well as deliver LPG in volumes of about five times what is currently produced by the Tema Oil Refinery (TOR).
In order to legitimize its role in the natural gas value chain, BOST’s mandate had to be expanded. In essence, what this means is that BOST would develop, build and manage the network of transmission pipelines we would need to move natural gas from its source to destinations such as markets and end users. For example, in the area of markets that we would be addressing, we are talking of power generation plants for electricity, minerals processing such as bauxite, manganese and iron ore and so forth that require natural gas. We’re also looking at using liquefied petroleum gas (LPG) and natural gas liquids derived from processing the natural gas to serve the petrochemical industry including fertilizer producers.” The company has built significant capacity from the early days of its establishment in 1993 when it started distributing refined petroleum products from its depots that are strategically located around the country. Up until 2001, BOST even announced petroleum prices on behalf of the government.
Our accomplishments have been that we have expanded from a level of about 20,000 cubic meters to 340,000 cubic meters in terms of storage capacity for our six depots. We also have pipelines of roughly 360km linking all the depots. We have built four barges about to be inaugurated to transport petroleum products on the Volta Lake through to the Northern Region as part of our distribution network. In a year, we can deliver up to a million metric tons of petroleum products through our network systems,” he said. For a country that has only one source of fuel supply, which is the Tema Oil Refinery, the strategic importance of BOST has never been underestimated by the authorities. And many analysts have lauded the vision of setting up the company to serve as a storage back-up for the country’s only refinery. It is common knowledge what will happen to regular fuel supply if there was not a company like BOST. Supply of petroleum products could be affected in three different ways: there could be industrial action at the oil refinery; there could be fire outbreak; or the plant may have to be shut down for routine maintenance. Without a BOST in Ghana, like some of her neighbours, Ghana would experience regular fuel shortages and motorists would have to endure long queues at fuel pump stations. Without BOST, even if Ghana got the oil for free there would be no place to store it. BOST has now built capacity to hold strategic reserves to meet about 6 weeks of national consumption of petroleum products and will increase this to 12 weeks in the medium to long term. Having successfully achieved its minimum target of 6 weeks of reserve capacity, Bost looks poised to take on its new additional role of becoming the logistics centre for moving the natural gas, once on-shore, to the various intended destinations. The whole idea is to be able to move the natural gas from sources such as Jubilee, Dzata and Sankofa fields to end users at the right time and to the right place at the lowest cost and in an environmentally and socially responsible manner. In addition, we will be able to store it and distribute it as and when its needed.
Funding is important to us. The funding requirement for natural gas investments is quite significant and we need to be able to partner with the right strategic partner or collaborators in order to achieve the targets we have. Firstly, the vision of the energy sector is to develop an energy economy and it means that we need to be able to ensure reliable and secure supply of energy services. Secondly, we want to become a net-exporter of petroleum products and electricity to the sub-region in the medium term so the country’s interest is to become the fastest growing destination for investments we are looking for relates to infrastructure development, which tend to be very capital intensive. We are talking of roughly US $500 million for just the Western corridor transmission system. BOST has a project that will integrate all our depots and we are talking of a petroleum terminal near Takoradi in the Western Region that would be a network of storage facilities. We require close to US$200 million for the project. These two projects are going to be a major flagship of our new mandate to move into the natural gas sector. One approach to raising funds for BOST projects is to depend solely on the public sector. This will take the form of bilateral arrangement between the Government of Ghana and any of the country’s development partner countries. We are now headed in a direction where we are going to look at the public-private partnership and bring in consortiums of technology providers or financiers who would be able to partner with us in some form to create a special purpose vehicle or joint ventures. We will ultimately have a hybrid of both public and private sector partnerships as we move forward. To enable BOST to attract suitable private partners, the government has put in the petroleum price build up, what it calls the BOST margin, which serves as some form of security for the company to borrow money commercially. BOST’s storage tanks could also be used as collateral security for any loan. We need investors who take a long term view of the projects they embark on. The reason is that , most of our projects are very capital intensive and require significant funding and resources in the area of technology. BOST would be able to provide investors with local knowledge and facilitate the investment in the country. It is important that investors consider value addition with local content in mind and ensure that they train and absorb local labour and develop local capacity.” It will take more than BOST to see Ghana’s gas –based industrialization materialized. Others such as the Ghana National Petroleum Corporation, which represents Ghana’s oil interests in the Jubilee field, the Volta River Authority, the Energy Commission, private investors as well as the government of the day, all have very important roles to play.
- Accra Plains Depot
- Akosombo Depot
- Tema – Akosombo Petroleum Pipeline (TAPP)
- Savelugu Transit Depot
- Debre Petroleum Landing Jetty
- Takoradi Petroleum Terminal
- Buipe – Debre Petroleum Pipeline
- Wa Petroleum Depot
The Bulk Oil Storage and Transportation Company Limited (BOST) has organized a field tour for some journalists in the Northern Region to its operational areas in the region to have a fair knowledge of its operations.
The Northern Region depot, which is located at Buipe in the Central Gonja District, supplies petroleum products to the Northern, Upper East, Upper West and some parts of the Brong Ahafo regions. It currently under went some upgrading for efficient functioning.
The maintenance works, which started in November 2013, was expected to be completed in September 2014 to enable petroleum products be supplied directly from its mother station in Tema. Mr Fred Ayamga, BOST Manager for the Buipe Depot who briefed the media at Buipe on Friday said the depot has a capacity of 50 million liters with seven tanks and stressed that out of the total capacity, 37 million liters was diesel while 13 million was petrol.
He said the depot receives its consignment from its mother company in Tema in the Greater Accra Region either through the Volta Lake or by road where a barge and tankers were used respectively and then supplied to the market. He explained that when the products were received, its temperature, density, water and pressure were checked to ensure that it met the standard before discharging and same was done before supplying the product to the market.
Mr Ayamga indicated that demand for petroleum products have increased drastically to 30 million liters per month and 800,000 liters per day explaining that since the depot was not operating, the Oil Marketing Companies take their deliveries from Tema instead of the Buipe depot.
Mr Ayamga said enough safety guidelines have been put in place to prevent any disaster including fire outbreaks at the installation. Mr Salifu Nat Acheampong, Corporate Communications Manager of BOST said the company was not to blame for the recent fuel shortages that hit the country. He promised that the company would open its doors more to the media in order to establish good rapport for a mutual benefit. Mr Benjamin Kwabena Wilson, Manager of Volta Lake Transport Company said there were usually two barges that were used to lift petroleum products from Tema to Buipe and spends eight days carrying a total of 830,000 liters each and pumped to the depot for onward supply.
At the Savelugu Booster Station, Mr John Azugu, Station Representative told the media that the pipeline was 261 kilometers from Buipe to Bolgatanga in the Upper East Region and that the booster station was set up to augment speedy and quantity supply to Bolga.
He said transferring petroleum products through the pipeline was cheaper and cost effective, because the pipes were buried underground, leakages and tempering with the supply was minimal.
The Bulk Oil Storage and Transportation Company Limited (BOST) has begun an expansion programme on its oil storage facilities throughout the country to commence a comprehensive commercialization programme.
The systems when fully upgraded is expected to make the Saharan countries the number one target markets and serve as the main supply point for bulk oil purchase by oil companies operating in the Brong Ahafo, Northern, Upper East and Upper West regions.
This came to light when a team of officials from the company’s Head Office led by Mr Salifu Nat Acheampong, Corporate Communications Manager of the Company took journalists round one of the depot in Bolgatanga where operations have stalled for about five years.
According to Mr Acheampong, the new BOST is expected to be the leading logistics company in Ghana and would this time be more efficient, be able to adequately manage losses, reduce man contact and establish larger automation systems to improve the overall performance of the company.
He said the new BOST when fully in operation by the close of the year, would create job avenues for the people in the Upper East Region because it is expected that more of the oil companies both local and foreign would establish their offices within these Depot jurisdictions and employ more of the people.
He praised the new Management Board of the company for their outstanding determination to get things working for the growth of the company and said government which is the sole shareholder is prepared to support the management team to bring the necessary growth through the expansion programme.
The Corporate Communications Manager reiterated the advantages in upgrading the system and said it would reduce transportation cost of carting oil products from the various depots dotted in the country, especially those cited in northern Ghana and improve trade among oil companies both local and international. It would also build a better business environment between Ghana and other neighbouring countries.
Mr Acheampong indicated that as part of its urge to be a leading logistics company in Ghana in the next two years, his outfit has coded the upgrading programme ‘operation 24’, which would guide the company’s management to pursue its vision in the next 24 months.
The Bolgatanga Depot Manager, Reverend Eddison Coffie, indicated that the Depot could store up to 46,500,000 liters of gasoline and diesel, adding that, the facility has two storage tanks for the former and five for the latter.
He said the expansion work would replace pumps with higher capacities to facilitate pumping of oil products faster, adding that, the expansion programme would increase supply from about 60 tankers to about 200 tankers daily.