Ghana Petroleum Hub: Opportunities and challenges

While Europe is turning towards energy transition and entering the Decade of Gas, Africa is turning towards realising its oil & gas potential, investing heavily in hydrocarbons production, and betting the next decades in creating strong midstream and downstream industries. This is driven by regional players including Nigeria, who is establishing new midstream and downstream authorities to oversee this transformation internally, and Ghana, with big plans for the next decade.


Ghana possesses the sixth largest proven petroleum reserves in Africa, with more than 7 billion barrels of petroleum, and 6 trillion cu.f of natural gas. There are currently approximately 11 petroleum agreements between the Government of Ghana, GNPC and operators, signifying the increased interest in Ghana’s oil industry.


Ghana’s $60 billion downstream ambition


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Minister Matthew Opoku Prempeh oversees the first Petroleum Hub Corp meeting

Ghana is constructing a $60 Billion Petroleum Hub mega project in the Western part of the country, announcing the project in 2018, before passing the Ghana Petroleum Hub Development Corporation Bill, established in October 2020. The Mega Project aims to function as a hub for the downstream industry in West Africa, aiming to become a world-class exporter.


As for why Ghana decided to undertake such an ambitious project, a memorandum announcing the Bill states: “This project will see to an increase in the presence of major international oil trading and storage companies while encouraging public-private partnerships and joint ventures between local companies and international companies,”


Petroleum Hub Plans


The Petroleum Hub will be located in Bonyere, with plans to hold and redistribute 30 million metric tonnes of oil per year.


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Source: SGS Ghana

The hub will house four refineries with a total capacity of 600,000 barrels per stream day (bpsd), aiming to cover 50% of the West African consumption of petroleum products, now that Sub-Saharan oil and gas consumption is increasing.


The hub will be built in three phases over a 13-year period, starting from 2018 and to be completed by 2030.

Some of the available projects for international investors include the four refineries with individual capacity of 150,000 barrels per day, two oil jetties, several storage facilities and two petrochemical plants.

The petroleum hub will require investment of up to $60 billion USD, with the first part of the plan requiring $12 billion USD.

Challenges and competition

Creating an entirely new infrastructure, establishing trade routes, securing buyers and everything in between will be very challenging for the country, since it hasn’t undertaken projects of such complexity before, and the monetization of the projects is highly dependent on increasing West and South Africa energy demands.

Fitch Solutions stated the following: “Ghana will only be successful if it can retain a cost competitive advantage over its global competitors [...] Ghana’s structural constraints and the risk of global refining competition reduce the viability of the project coming to fruition and consequently the prospects of Ghana becoming a key exporter across SSA”.`

Furthermore, Ghana is about to face steep competition. Nigeria is constructing the Dangote refinery in the Lekki Free Zone, a 650,000 barrels per day (BPD) integrated refinery project. The refinery is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility, with 1,100 kilometers of pipeline ready to handle 3 Billion cf of gas per day The Dangote Refinery will cover 100% of the Nigerian requirement of all refined products while leaving a significant surplus to export. While the Dangote project is designed to process Nigerian crude, it will also hold the ability to process other crudes, and expand as Nigeria’s production grows.

Opportunities for internationals


While Ghana is facing steep competition, the last 10 years show a promising industry, with the potential to compete against Angola and Nigeria in the future, especially if rising energy and oil derivative demands continue to increase in the continent.


Ghana has been making active efforts to avoid the so-called "resource curse", enacting a Petroleum Revenue Management Act in 2011, establishing a committee that closely monitors and evaluates compliance of the government and relevant institutions in the management and use of petroleum revenue, reducing above-ground risks and institutional friction for international investors.

Ghana’s government has openly declared that it will reward investors willing to invest and meet Ghana’s local content requirements, especially now when it is kickstarting several exploration and infrastructure projects.

This synergises really well with Ghana’s need for gas storage facilities and technical training, creating opportunities both for construction companies and service providers.

Furthermore, Ghana’s government is investigating revising the regulations of the sector in an effort to increase Ghana’s oil recovery rate of 25%, which leaves a lot of room for optimization.

Despite current local content requirements, Ghana's local companies require international oil and gas service firms to participate in the country's ambitious projects, especially in offshore activities and midstream, creating new opportunities for foreign partners that have the technology and know-how to enter the country, and position themselves for the time when Ghana's ambitions align with project completions.