Ghana, China reach $800 mn gas development deal

Ghana will borrow $800 million from China to build natural gas infrastructure, the head of the national gas company said Friday, months after the country became Africa's newest major oil producer. "An agreement has been reached and we have secured $800 million from the Chinese Development Bank for the project to take off," George Sipa-Adzah Yankey told AFP on Friday. He said the West African nation's government had signed off on the deal and parliament is now expected to approve it. Further details of the loan were not yet disclosed. The deal marks the latest sign of China's growing influence in Africa as well as Ghana's bid to capitalise on its recent oil and gas discoveries. The country's government had pledged that major oil production, which began in December, would not result in the flaring of gas -- essentially burning it off -- with the practice viewed as harmful to the environment. But the country did not have infrastructure in place to properly develop its gas resources when oil production began. The work resulting from the loan from China will include pipeline construction, and the country is expected to begin producing gas by the end of 2012 at the earliest, said Yankey of the Ghana National Gas Company. He said gas production is expected to stabilise at around 120 million cubic feet per day. Ghana has begun producing oil from its offshore Jubilee field, one of the largest discoveries in West Africa in recent years. The field's operator is Anglo-Irish firm Tullow. Tullow said in July it was producing around 80,000 barrels a day and expected to reach 120,000 bpd this month. It has estimated that the field's recoverable resources amount to up to one billion barrels. China has previously shown interest in Ghana's oil, with the Asian nation seeking to fulfill its growing energy needs. Ghana is viewed as a model of democracy in West Africa, but its newly found oil wealth has brought with it warnings of the so-called resource curse, with many pointing to nearby Nigeria as an example. Nigeria, Africa's largest oil producer, has long been held back by deeply rooted corruption and mismanagement, while aspects of its economy outside of oil have been neglected.