Chinese firm pips GAIL-led team to the post to win Ghana gas pipeline project

In yet another instance of India losing out to an aggressive China, a consortium led by state-run GAIL (India) has lost the race to Sinopec of China for a major gas pipeline project in the West African nation of Ghana. Similarly, Ghana has preferred China for development of various infrastructure projects, including laying cross-country railway network.

This development could put a question mark over the future of setting up a $1.2-billion fertilizer plant by Rashtriya Fertilizer Limited (RFL) in Ghana under the $5-billion credit line by Exim Bank of India as the contentious issue of price of gas continued to hold back the progress of the project announced in 2010.

Officials in the Petroleum Ministry said that the GAIL-led consortium, comprising Engineers India Limited (EIL) and Punj Lloyd, had submitted a proposal for the gas infrastructure project, including Central Processing Facility (CPF) in Ghana. The National Gas Company of Trinidad & Tobago too was in the race. The GAIL-led consortium had submitted its proposal to Ghana National Petroleum Corporation in July 2010, and had subsequently submitted a proposal for early utilisation of gas on December 27, 2010.

“Sinopec of China was a clear winner as the Government of Ghana got a long-term funding assurance from China for not only this project but also other infrastructure projects. India has been slow on reacting to proposals for developing various other infrastructure projects in Ghana, and, therefore, the African nation opted for China as it has been assured of funding to the tune of almost $11.5 billion for various projects over the next five years,’’ the official said.

It is learnt that China would be providing $800 million funding for gas-related projects to Ghana. The first phase of the project has already begun, and is expected to be completed by 2013.

Further, Exim Bank of China has agreed for the $6 billion credit line, while the China Development Bank offered another $3 billion along with $2.5 billion from the ICBI China for various projects in the infrastructure and agriculture sectors. They would also be developing the Eastern Railway and Western railway lines with a funding of $500 million.