Ghana needs Nigerian gas beyond TEN projects

Petroleum Minister, Emmanuel Armah-Kofi Buah has confirmed that the country cannot wean itself completely from Nigeria Gas (NGas), even after the ENI and Tweneboa, Enyenra and Ntomme (TEN) projects come on stream.

 

The ENI and TEN projects will provide an additional 60mmscf of gas to augment the 120MSCF of gas per day currently exported onshore from the Jubilee Field for processing by the Ghana Gas Company. 

“We have learnt quick enough to be planning. If you look at our demand and the volume of gas, you will see that we are already talking about Liquefied Natural Gas (LNG). We are doing a project where we want to open up the pipelines and make sure that there is flexibility to send gas from Atuabo to Tema when the ENI gas comes on-stream.  

“But we think based on the demand patterns we are seeing and the power plants, we need imported gas that will be brought into the country in its liquefied form. The reality is we have projected that in the next 10 years, 80 percent of the power plants in Ghana will be thermal -- and the cheapest source of fuel for this is gas. So we need to make sure there is enough gas. Nigeria needs its gas more than us and we have learnt the hard way. We need to plan independently, as if nobody is around to help us.”

Nigeria Gas (NGas) allegedly suspended its plan to cut gas supply to Ghana, following the payment last year of US$9.5million out of US$181million debt owed the company by the Volta River Authority (VRA).

NGas had threatened to suspend gas supply to Ghana on Friday, October 15, 2015 if the country failed to pay all the debt.

Currently, Ghana’s daily gas needs are estimated at about 450 million standard cubic feet (mmscf) and the national gas company Ghana Gas’ output is currently estimated at a little over 100 million mmscf, which is not enough to fuel generating units in the Aboadze and Tema thermal enclaves.

The country currently has associated gas reserves of more than five-trillion standard cubic feet (TCF).

Work is currently going on at the ENI-Sankofa Project, while additional volumes are expected to be added to the reserves.

He also added that the country has taken some “bold decisions to solve Ghana’s power problems including addressing ‘the legacy debts that will free VRA and ECG’. We have now introduced the Energy Sector Levy to try and address the legacy debts; without that, it will be difficult to have VRA and ECG having a clean system”.

The new levies slapped on petroleum products will squeeze out of consumers an incremental revenue of GH¢3.2billion annually, based on volumes of petrol, diesel and LPG consumed in 2015, an analysis by the African Centre for Energy Policy (ACEP) has shown.

When existing levies and taxes are added, government is estimated to earn some GH¢5billion annually from taxes on petroleum products.

The Public Interest and Accountability Committee’s (PIAC) 2015 Semi-Annual Report shows that the Ghana National Gas Company (GNGC) was indebted to the Ghana National Petroleum Corporation (GNPC) to the tune of US$103.63million as at June, 2015.

The debt is the result of Volta River Authority’s (VRA) inability to pay for gas supplied by Ghana Gas. Source:B&FT