In June 2024, the government of Ghana reached an agreement with a consortium of private-sector partners to develop the initial phase of what will become the West African subregion’s first integrated downstream petroleum hub as part of the country’s broader plan to increase domestic refining capacity and ensure a diversified, efficient, and financially sustainable national energy economy.
Overseen by Ghana’s state-owned Petroleum Hub Development Corp. (PHDC), the multiphased megaproject will include three refineries, five petrochemical plants, storage tanks, jetties, a port, and associated LNG and logistics infrastructure, all of which is to be funded solely by private-sector investors from across the petroleum value chain.
Alongside presenting the latest update on the PHDC hub’s first-phase development and providing an overview of the overall three-phase industrial hub, this article briefly examines the status of Ghana’s existing in-country refining landscape.
Phase-1 partnership
On June 18, PHDC, on behalf of the Ghanaian government, signed a deal with a consortium comprised of Touchstone Capital Group Holdings Ltd., UIC Energy Ghana Ltd., China Wuhan Engineering Co. Ltd., and China Construction Third Engineering Bureau Co. Ltd. to build Phase 1 of the PHDC hub.
According to official project documents, Phase 1 of the project will be situated in the southern section of a total 20,000-acre tract of land PHDC acquired for the entire hub’s development in the Jomoro municipal district of Ghana’s Western Region.
Specifically slated for construction across 6,590.8 acres abutting the Gulf of Guinea, Phase 1 of the industrial hub will house:
- One 300,000-b/sd refinery.
- One 90,000-b/sd petrochemical plant.
- Storage tanks with total capacity of 3 million cu m.
- Jetty, port infrastructure.
In a notice on its website, PDHC confirmed machinery was in place in Jomoro as of February 2022 and ready to begin site-preparation works for the project’s first phase.
While neither PDHC nor member companies of the consortium have revealed specific responsibilities or timelines outlined under the June agreement, PDHC said it will execute the entirety of the industrial hub in three phases between 2024 and 2036 at an overall estimated cost of about $60 billion.
Major onshore installations
Designated as a free-zone area, the PDHC hub, once completed, will feature an overall crude oil processing capacity of at least 900,000 b/sd spread across three new 300,000-b/d refineries, each of which can be expanded to 500,000 b/sd between 2030 and 2035 for an overall processing capacity of 1.5 million b/sd. Each of the project’s three phases will include a new refinery.
PDHC has allotted 750 acres for construction of each refinery, and the three refineries will be able to source their feedstock from Ghana or abroad.
The hub will include five multi-purpose petrochemical plants, each with a capacity to produce 90,000 b/sd of chemicals, as well as fertilizers, lubricants, and cosmetics. Three of the plants will use natural gas as feedstock, with two plants processing crude-derived byproducts from the site’s refineries. Following construction of the hub’s first petrochemical plant in Phase 1, Phases 2 and 3 will add two new plants each.
The PDHC hub’s interconnected tank farms will occupy a 400-acre tract and have an overall storage capacity for crude and finished products of 10 million cu m to be commissioned gradually across three phases. In addition to Phase 1’s 3-million cu m storage capability, Phase 2 will add 4 million cu m of capacity, with the final 3 million cu m to come during Phase 3.
The hub—which will have two or more jetties with multiple berths and at least four discharge-loading points—will be equipped to handle vessels of all sizes, according to PDHC.
Alongside planned road and rail networks and an airfield, the PDHC hub will include installations for power generation, water and waste treatment, emergency response services, and other yet-to-be-identified logistics services, as well as business centers, residential complexes, and social centers.
The hub also will provide a series of related services and structures to operators across the upstream and downstream sectors, including:
- Port and marine-based services consisting of buoys, deepened berths, a shore terminal and mooring services, and large and small-scale jackets.
- Maintenance and repair services consisting of off-dock yard and dry dock zones for vessel repair, engineering, and decommissioning, as well as vessel servicing and spare parts.
- Nautical services consisting of buoy systems using moored displacement-style hulls and semisubmersible configurations, in addition to towing, terminal traffic, and port management.
Other services provided for operators at the site will involve remote monitoring and diagnostics, lubricants storage and supply, and services relating to applicable inspections and certifications.
Project background, overview
A net importer of petroleum products, the country’s Ministry of Energy in February 2019 approved launching the masterplan for developing the proposed industrial hub to help address Africa’s growing demand for petroleum and petrochemical products. The hub is also intended to ensure long-term economic growth and employment opportunities for Ghanaians and the country’s indigenous businesses.
Formally established in 2020 under the Ghana Parliament’s Petroleum Hub Development Corporation Act 2020 (Act 1053) to oversee implementation of the project, PDHC was tasked with attracting and facilitating private-sector investments, including assisting potential operating companies in acquiring the licenses and permits from government regulatory bodies required to operate within the hub.
Grounded in Ghana’s overall energy transition plan—which holds the proposed hub at its center—one of PHDC’s primary tasks is to form partnerships to deploy sustainable methodologies to mitigate emissions and use greener energy in the hub’s operations. Natural gas and other fossil-based products produced at the hub will continue to be part of Ghana’s energy mix as the country strategizes to increase renewable energy in the medium-to-long term, PHDC said.
One of the lowest carbon emitters in the world, Ghana—which is targeting 2070 to attain net-zero emissions—intends for the proposed hub to achieve a balance of security, affordability, and sustainability in how energy is accessed and used, according to PHDC. The hub aims to become an energy-generating and petroleum products-producing anchor of the African Continental Free Trade Area by refining a major portion of Africa’s domestic crude production to supply finished products and LNG to markets both within the continent and beyond.
With its focus on environmental sustainability and the global transition to net-zero operations, PHDC said it intends for the hub to serve as a bridge between Africa’s upstream and downstream sectors while contributing to energy security and justice across the continent.
Existing refining landscape
Ghana’s launch of the PDHC hub comes amid the nation’s ongoing struggle to maintain adequate domestic refining capacity.
According to the most recently available downstream petroleum industry report published by Ghana’s National Petroleum Authority (NPA) in mid-September 2023, the country is equipped with a total installed processing capacity of 50,800-b/sd divided across three refineries in the Heavy Industrial Area of Tema, Greater Accra Region, including:
- State-owned Tema Oil Refinery (TOR) Co. Ltd.’s existing-but-inoperable 45,000-b/sd refinery.
- Privately held Platon Gas Oil Ghana Ltd.’s 1,800-b/sd refinery.
- Privately held Akwaaba Oil Refinery Ltd.’s 4,000-b/sd refinery.
Following the release of NPA’s report, however, the country added capacity via first-phase commissioning of a proposed two-phase refinery also in Tema by Sentuo Oil Refinery Ltd. (SORL), a subsidiary of privately held Chinese conglomerate Sentuo Group.
Operational as of Jan. 26, 2024, Phase 1 of SORL’s refinery is equipped to process 2 million tonnes/year (tpy) of crude oil as part of a public-private sector partnership under Ghana’s broader industrialization agenda, Ghana’s President Nana Addo Dankwa Akufo-Addo said in a statement.
Ghana currently relies on foreign sources to meet 97% of its overall demand for finished petroleum products, Akufo-Addo said, and wants to reduce this dependence.
Alongside creating a stable supply of petroleum products, creating additional jobs, and increasing the competitiveness of Ghana’s manufacturing sector, Akufo-Addo said he expects startup of the refinery’s second phase—which will expand crude processing capacity at the site to 5 million tpy—will further support the government’s Made-in-Ghana initiative to prioritize local production from local resources, including attracting increased outside investments in the nation’s petroleum, agriculture, pharmaceuticals, and construction industries.
While neither Akufo-Addo nor SORL disclosed details regarding startup or operations of the refinery’s first phase, Shanghai Hoto Engineering Inc.—which delivered engineering, procurement, and construction (EPC) services for the project—confirmed SORL “seamlessly commissioned” all Phase-1 “process units, storage-transportation installations, and utilities… followed by [production] of qualified products [in December 2023].”
The timeframe for completion and startup of the new refinery’s second phase has yet to be officially revealed by any of the parties.
While Akufo-Addo in January 2024 reiterated the government’s “unflinching commitment” to restoring operations at the TOR refinery, no further details regarding the proposed revitalization plan have been disclosed.
