From Ghana Web

Four local insurance companies have successfully secured a deal to underwrite the Ghana Gas infrastructure project at Atuabo to the tune of about US$801million, B&FT has gathered.

The deal, which is one of the biggest to be underwritten locally, is a major milestone toward ensuring local content participation in the emerging oil and gas sector.

Persons familiar with the deal told B&FT it was made possible through a consortium of insurers that include SIC, GLICO, Phoenix Insurance and Vanguard Assurance, and will cover the production phase of the biggest gas project in the country which is expected to start early next year.

Information available indicates that SIC will assume 50 percent of the risks cover while GLICO will take up 30 percent, with Phoenix Insurance and Vanguard Assurance acquiring 10 percent each.

SIC is not new to the Ghana Gas project, as it provided insurance cover for the US$1billion project during the construction phase.

However, some insurance practitioners are curious at the non-participation in the deal by three of the top-five biggest insurance companies in the country who together boast an asset base of over GH?178million.

Nonetheless, the local risk cover for the Ghana Gas project is seen as a way to ensure that activities of the burgeoning oil and sector are consistent with provisions in the local content and insurance laws.

The deal also negates concerns that risks-cover in the petroleum industry is beyond the capacity of domestic insurance companies.

Ghana currently has a gas deposit of about 200 billion standard cubic feet offshore the Jubilee Field, which the country wants to utilise as a source of cheap fuel to power its thermal plants to generate electricity.

Read more at Ghana Web