After a twelve-year delay, Ghana through the Bulk Oil Storage and Transportation Company Limited (BOST) has taken delivery of 12-inch pipelines from the United States of America which is expected to be used to expand the petroleum transportation line from Tema to Akosombo.
The Initial cost of pipes to Ghana was USD $63.2 million dollars, however, an additional USD $8 million dollars was used to refurbish the abandoned pipes and for the settlement agreement. USD $2.1 million dollars was spent to ship the pipes, bringing the total cost of securing the pipes to USD $73.78 million dollars.
Expected Boost to BOST
The pipelines which were received by BOST in Ghana on Friday, 19th of November 2021, will increase the Tema-Akosombo pipeline capacity from the current 6 inches to 12 inches, thereby improving the delivery of petroleum products within the country.
Processes for the procurement of the pipelines from American Tank & Vessel Inc. (AT&V) began in 2009 after the Exim Bank in the United States guaranteed a loan of $79.4 million to cover the export sale, as well as related local project costs in Ghana.
Specifically, it was expected to support the expansion of oil storage capability at the Mami Water Depot from 120,000 metric tons to 230,000 metric tons, and the construction of two 70-kilometre pipelines to transport petroleum into the interior areas of Ghana.
Decision to Repair
Managing Director of BOST, Edwin Provencal in September 2021, explained that the additional cost of $8 million dollars which was used to repair the damaged pipelines was worth it because of the enormous expansion the pipes will bring to petroleum transportation in the country.
“We started the procurement of these pipelines in 2009 with an EXIM facility. Fast-forward to today, the pipelines are still stuck in the United States of America, Houston to be precise. My two predecessors started sandblasting and repairing the pipelines. The good news is that by the end of August 2021, the shipment of the pipeline will commence” the BOST Managing Director said at the time.
“We have procured a logistics provider to visit the site for the pipes and assess the facilities, and the firm tells us that the pipes are good and ready to be shipped to Ghana. Unfortunately, a hundred and nine of them have been damaged and an additional $8 million had to be used to repair them, but the remaining are all in good shape” he added.
The Bulk Oil Storage and Transportation Company Limited(BOST) was incorporated in December 1993 as a private limited liability company under the Companies Act,1963 (Act 179) with the Government of Ghana as the sole shareholder. BOST has the mandate to “develop a network of storage tanks, pipelines and other bulk transportation infrastructure throughout the country.
OST is also mandated to rent or lease out part of the storage facilities to enable it to generate income, keep Strategic Reserve Stocks for Ghana, own, manage and develop a national network of oil pipelines and storage depots, manage the “Zonalization” policy of the National Petroleum Authority(NPA) and develop the Natural Gas Infrastructure throughout the country.
In this regard, BOST is responsible for building strategic reserve stocks to meet a minimum of six (6) weeks of national consumption in the short and medium-term and to increase the stock level to twelve (12) weeks in the long term.
To adequately fulfil its mandate, BOST has developed a network of storage and pipeline infrastructure throughout the country. The Company currently has six (6) Depots nationwide.
These are located in the Accra Plains, Mami Water, Akosombo, Kumasi, Buipe and Bolgatanga. Pipelines link the Tema Oil Refinery (TOR) to the Accra Plains Depot which in turn is linked to the Mami Water Depot and ends at the Akosombo Depot.