After a 12-year delay, Ghana has taken delivery through the Bulk Oil Storage and Transportation Company Ltd (BOST) of a consignment of 12-inch pipes from the United States which are expected to be used to expand the petroleum transportation line running between Tema and Akosombo.
The initial cost of the pipes to Ghana was US$63.2 million. However, an additional $8 million was used to refurbish the pipes after they were abandoned and to cover the cost of a settlement agreement.
A further sum of $2.1 million was spent to ship the goods, bringing the total cost of securing the pipeline to $73.78 million.
Expected boost to BOST
The pipes, which were received by BOST in Ghana on Friday (19 November 2021), will increase the Tema-Akosombo pipeline capacity from the current six inches to 12, thereby improving delivery of petroleum products within the country.
Processes for procurement of the pipes from American Tank & Vessel Inc (AT&V) began in 2009 after Exim Bank of 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, the loan was expected to support the expansion of oil storage capability at the Mami Water Depot from 120,000 to 230,000 metric tonnes, and the construction of two 70-kilometre pipelines to transport petroleum into the interior of Ghana.
Decision to repair
In September 2021, the managing director of BOST, Edwin Provencal, explained that the additional cost of $8 million that was incurred 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, [and] the pipelines are still stuck in the United States of America – Houston, to be precise,” the BOST director said at the time.
“My two predecessors started sandblasting and repairing the pipes. The good news is that by the end of August 2021, the shipment of the pipeline will commence.
“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, 109 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,” Provencal said.
The Bulk Oil Storage and Transportation Company Ltd 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.
BOST is also mandated to rent or lease out part of its 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 “zonalisation” policy of the National Petroleum Authority, and develop natural gas infrastructure throughout the country.
In this regard, BOST is responsible for building strategic reserve stocks to meet a minimum of six weeks of national consumption in the short and medium term and to increase stock level to 12 weeks in the long term.
To fulfil its mandate, BOST has developed a network of storage and pipeline infrastructure across Ghana. The company currently has six depots nationwide.
These are located in the Accra Plains, Mami Water, Akosombo, Kumasi, Buipe and Bolgatanga. A pipeline links Tema Oil Refinery (TOR) to the Accra Plains Depot, which in turn is linked to the Mami Water Depot, ending at the Akosombo Depot.