Ghana launches $12bn petroleum hub amidst environmental concerns

Ghana’s President Nana Akufo-Addo has launched the first phase of the country’s petroleum hub project, estimated to cost $12 billion.

The project is designed to elevate Ghana’s standing as a key player in Africa’s energy sector. It also aims to create a modern, diversified and financially sustainable energy economy for the country.

The hub, which will be developed in three independent phases, will include a 300,000 barrel per day (bpd) refinery, a petrochemical plant, and extensive storage and port facilities.

During a launch ceremony, President Nana Akufo-Addo expressed his optimism about the project’s potential to transform Ghana’s economy. “Today is very good day for our homeland, Ghana. This project promises to be a cornerstone of our nation’s development, ensuring that all Ghanaian homes and industries have access to reliable, affordable and environmentally sustainable energy,” he said.

The hub is expected to create approximately 780,000 direct and indirect jobs, stabilise the national currency and stimulate local economic development, he said.

President Akufo-Addo also highlighted the environmental considerations embedded in the project, emphasising the incorporation of cutting-edge technology and green buffers to support local fauna and flora.

In addition to the economic and environmental benefits, the project is expected to have a profound social impact, particularly in Jomoro, a coastal region in the southwest of Ghana.

The project is also expected to lead to the establishment of the Jomoro Petroleum Hub Development Corporation (JPHDC), with its headquarters in Jomoro.

Project scale and ambition

Experts told Gas Outlook that the project is ambitious and noted its realistic execution and environmental concerns. They also suggested incorporating cutting-edge technology and green buffers to support local fauna and flora.

Joshua Narh, Executive Chairman of the Energy Chamber of Ghana, told Gas Outlook that the project is ambitious and aims to create one of the largest petroleum processing and storage facilities in Africa. He highlighted some key challenges, such as infrastructural readiness, regulatory and bureaucratic hurdles, and financial competition.

“Ghana’s existing infrastructure, especially in terms of energy and transportation, may not fully support a project of this magnitude. Delays in approvals and inconsistent regulatory frameworks could slow down progress, as has been seen with similar large-scale infrastructure projects in Africa.

“Financing and International Competition: Competing for global investment with oil and gas hubs like Nigeria, Angola, and Namibia could challenge Ghana’s ability to secure sufficient funding,” he added.

However, if executed properly, the hub could “position Ghana as a vital energy player on the continent, enhancing energy security and creating thousands of jobs. The inclusion of refining, petrochemical plants, and port facilities broadens the scope beyond raw petroleum extraction, which adds credibility to its ambition,” Narh noted.

Energy challenges

Daniel Gyimah Yeboah, a National Service Person at the Ghana Atomic Energy Commission, told Gas Outlook that Ghana’s energy issues especially its reliance on imported refined petroleum products, have been acknowledged.

“Ghana is working towards self sufficiency and reduction in its energy import dependency. The petroleum hub project is expected to ensure a more reliable supply of products for both domestic use and export, driving industrialisation and job creation.”

Narh also noted that experts have praised Ghana’s effort to leverage its existing oil reserves, estimated at around 660 million barrels, to transform its energy economy. He said that by refining crude oil domestically, the country could meet local demand and export excess capacity to regional markets, especially in West Africa.

“The government’s vision also aligns with the Africa Continental Free Trade Area (AfCFTA), which promotes regional integration and could provide Ghana with new opportunities for energy exports.”

Funding challenges

Yeboah noted that the project will demand significant investment from both the public and private sectors. He said that acquiring this level of funding in the recent global economic environment could be challenging.

“The volatility of oil prices, inflation and competition from other African countries with similar projects may create challenges in obtaining financing and also effective management of operational costs.”

Narh said financing remains a critical concern for the project, given the $12 billion price tag. He said the three-phase approach might allow for staggered financing, attracting international and domestic investors gradually.

The government seeks to “engage private sector partnerships and foreign direct investment to fund the hub. The focus on renewable energy could dampen interest in oil-related projects, making it harder to attract investors committed to fossil fuels.

“Unstable oil prices could discourage long-term investment, especially if crude oil prices drop significantly, as seen during the COVID-19 pandemic,” he added.

Environmental considerations

Narh said that environmental concerns are particularly critical for a large-scale energy infrastructure project. While the government has expressed a commitment to sustainable practices, he said the environmental impact of constructing a refinery, petrochemical plant, and port facilities could be substantial.

Narh said environmentalists worry about pollution risks, particularly in coastal areas considering potential challenges like oil spills, water pollution and air quality concerns.

“Emissions from the refinery and petrochemical plants could contribute to air pollution unless cutting-edge technologies are adopted. We will need to navigate the Environmental Protection Agency’s regulations, ensuring that environmental impact assessments are conducted and mitigation strategies implemented,” he stressed.

Yeboah also said that environmental impact assessments are very important to ensure the project doesn’t damage the environment. He noted that activities like oil spills, pollution and depletion of local water resources due to industrial activities may pose significant challenges.

“To avoid long-term environmental damage Ghana has to ensure compliance with both local and international environmental regulations.”

Technology and green buffers

Yeboah said that integrating modern technology including carbon capture technologies, waste treatment systems and energy-efficient refining processes, will be crucial for efficiency, environmental protection and sustainability.

Narh added that incorporating cutting-edge technology could mitigate some of the environmental concerns. He said the refinery and petrochemical plants could adopt cleaner technologies, such as carbon capture and storage, to reduce greenhouse gas emissions.

“Similarly, wastewater recycling systems could be implemented to protect local water bodies.

Additionally, the project can include green buffers — such as planting local species around the facility’s perimeter — to preserve biodiversity. Integrating technology and sustainable practices into the project design is crucial to ensure compliance with international environmental standards.

“While the government’s ambition is commendable, the success of the project will depend heavily on the political will to see it through multiple phases, especially beyond the current administration. The country will also need to bolster its workforce to handle the advanced technology and operational complexities of the refinery and petrochemical industries,” he cautioned.