Ghana’s energy sector has undergone significant transformation in recent years, particularly with the growing role of natural gas as a vital fuel for electricity generation.
The construction and operation of gas processing plants are key pillars of this transition.
As Ghana continues to grapple with challenges such as power outages, energy sector debts, and the need for sustainable economic growth, the establishment of additional infrastructure, such as a second gas processing plant (GPP II) is increasingly justified.
Enhancing revenue and reducing cost
One of the most direct benefits of investing in gas processing infrastructure is the financial savings and economic value it brings to the country. Ghana Gas, through its transition from Chinese contractor Sinopec to local Ghanaian engineers in 2017, has saved the country an estimated US$250 million over time.
This milestone does not only demonstrate the competence of local engineers but also emphasises the cost-efficiency of indigenising strategic energy projects. The operationalisation of the Atuabo Gas Processing Plant (AGPP) helped the country cut down on crude oil and heavy fuel oil (HFO) imports for power generation, thereby saving foreign exchange.
Additionally, processed gas from Atuabo supplies fuel to thermal plants in Aboadze, Tema, and other industrial centers, contributing to more affordable electricity generation.
Natural gas is significantly cheaper than liquid fuels, reducing operational costs for the Volta River Authority (VRA) and Independent Power Producers (IPPs). These cost reductions, if passed through to utilities and consumers, can improve financial sustainability within the energy sector.
Job creation and industrial development
The transition to local engineers and technicians at Atuabo did not just save money, it also empowered the Ghanaian workforce.
Ghana Gas has reportedly created thousands of direct and indirect jobs through its operations, contributing to local employment and skills development. The establishment of supporting services, logistics, maintenance, and ancillary industries in the Western Region has had a multiplier effect on economic activity.
With improved power supply reliability from gas-fired thermal plants, industrial zones such as the Tema Industrial Enclave and Free Zones can operate more efficiently. In turn, this enhances export potential, tax revenues, and foreign direct investment.
Improving energy sector stability and debt management
The energy sector’s financial health remains a persistent challenge in Ghana. As of early 2025, Ghana’s energy sector debt had ballooned to over US$3 billion. This debt largely stems from power purchasing agreements, inefficiencies in power distribution, and fuel supply issues.
One major consequence is the indebtedness of the Electricity Company of Ghana (ECG) to power producers and the Volta River Authority (VRA), leading to cash flow constraints and curtailments.
Gas infrastructure can help address this issue by lowering fuel costs and enhancing reliability. When thermal plants operate efficiently using gas from domestic sources, power producers reduce their cost of generation, improving their ability to meet financial obligations.
Furthermore, gas-based power is more predictable compared to hydroelectricity, which is subject to water inflows and climate variability.
Electricity generation and grid stability
Since 2017, the Atuabo Gas Plant has played a central role in stabilizing Ghana’s power grid. It has supported up to 450 million standard cubic feet per day (mmscfd) of gas supply capacity, feeding key thermal plants such as the Takoradi Thermal Power Station (T1-T3) and AMERI.
This has enabled Ghana to meet peak electricity demands while maintaining reserve margins. Gas also offers flexibility for load-following operations, allowing power stations to respond quickly to demand fluctuations, improving grid stability.
With increased supply reliability, industrial and residential users experience fewer outages, boosting productivity and improving quality of life.
Power distribution challenges and opportunities
Despite improvements in generation, power distribution remains a weak link. ECG and Northern Electricity Distribution Company (NEDCo) suffer from high technical and commercial losses, estimated at up to 30–40% of distributed power.
These losses translate into billions in unrealized revenue. While gas plants do not directly solve distribution inefficiencies, they improve the upstream supply chain, making investments in the distribution network more worthwhile.
For example, reliable generation encourages smart metering, grid automation, and private sector investment in mini-grids and embedded generation.
Justification for the second gas processing plant (GPP II)
The proposed Second Gas Processing Plant (GPP II) is not merely an expansion project, it is a strategic necessity.
The Ghana National Petroleum Corporation (GNPC) projects increased offshore gas production from fields such as TEN and Sankofa. The Atuabo facility, with a design capacity of 150 mmscfd, is already operating near capacity.
Additional processing capacity is needed to handle incremental volumes and avoid gas flaring, which wastes valuable resources and poses environmental hazards.
GPP II will also:
• Enable greater volumes of lean gas supply for power and industry.
• Allow for more liquefied petroleum gas (LPG) extraction to meet domestic demand and reduce imports.
• Stimulate downstream petrochemical industries, including fertilizer and plastics production.
• Strengthen Ghana’s position as a regional energy hub, with export potential to Togo, Burkina Faso, and Ivory Coast.
If strategically positioned in the Western Region, GPP II will benefit from existing pipelines and can be integrated into national infrastructure with lower marginal cost.
Game-changer
Gas processing infrastructure has proven to be a game-changer for Ghana’s energy sector. Since 2017, the Atuabo Gas Plant has contributed to significant cost savings, job creation, and improved power generation reliability. It has underpinned thermal generation, stabilized the grid, and allowed Ghana to reduce its reliance on costly fuel imports.
These successes justify the planned Second Gas Processing Plant, which will unlock further value from Ghana’s natural resources, enhance energy security, and bolster long-term economic resilience.
The integration of domestic gas into Ghana’s energy ecosystem is not just a technological upgrade, it is an economic imperative. With deliberate planning, policy coherence, and stakeholder collaboration, gas infrastructure can become the backbone of Ghana’s energy transformation and a catalyst for industrial development in the decade ahead
The writer, Richmond Eduku, is a Finance & Energy Policy Analyst.
