Nigeria Gas to cut gas to Ghana; But Power Ministry says it is unaware

Nigeria Gas (N-Gas) has threatened to cut gas supply to Ghana between tomorrow and Thursday if the Volta River Authority (VRA) fails to honour its debt obligations.

The VRA is said to owe N-Gas more than $182 million and the Ghana National Gas Company (Ghana Gas) about $150 million, a situation which is said to be crippling operations of the two companies.

Ghana has a deal with Nigeria to receive a contractual 120 million standard cubic feet (mmscf) of gas daily. The government of Ghana has in the past, held several discussions with Nigeria over the payment of the long-standing debt.

Checks by the Daily Graphic at the Ministry of Power showed that officials were not aware of the new threat from Nigeria.

An official who spoke to the Daily Graphic on condition of anonymity said the ministry was yet to be briefed on the new warning and expressed the hope that the matter would be resolved amicably.

The threat

The threat means that thermal units in the country will have to compete for the 100 mmscf from the Atuabo gas plant.

The country will also have to start shopping for light crude oil to replace gas if N-Gas goes ahead with its decision.

Checks from the supplier indicate that it is faced with two issues that will keep it in business — either it cuts supply to Ghana completely or curtail flow.

Currently, the non-payment by Ghana, according to the supplier, was stalling many of its operations and making it difficult to meet its overhead expenses.

Therefore, any cessation of Nigerian gas supply to Ghana through the West African Gas Pipeline Company (WAPCo) between tomorrow and Thursday would worsen the current power rationing in the country.

Aside N-Gas, the VRA is yet to honour transportation cost to WAPCo for the product from the metering station in Itoki in Nigeria to Takoradi.

An official of WAPCo explained that currently it had a lot of challenges from the high cost of maintaining the lines after the volumes increased, other overheads, as well as payment of the salaries of workers.

“The truth of the matter is that for those of us at WAPCo, the payment for transportation is our only source of income. Therefore, we are down financially as we speak. They owe us more over $82 million and paid only about $10 million for the July supply. The rest is yet to come,” he said.

The government recently charged the Public Utilities Regulatory Commission (PURC) to come up with a debt management strategy to clear more than the $312m debt, being the cost of supply and transportation of natural gas from Nigeria and Atuabo to the country’s thermal units in the Tema and Aboadze thermal enclaves.

As of the time of calling for the strategy, the sources said the VRA was yet to pay more than $150 million, being the cost of gas transmitted to it by the country’s infant company, Ghana Gas, in addition to $82 million and $100 million payable to WAPCo and N-Gas, respectively.

Wereko-Brobby

Meanwhile, an energy expert, Dr Charles Wereko-Brobby, has stated that power rationing could get worse if the government does not deal with the gas supplier.

According to the former Chief Executive Officer of the VRA, the Sunon Asogli Power Plant, which is an independent power plant, ran solely on gas from Nigeria and would be grounded if gas supplies from Nigeria ceased. The plant generates 200 megawatts.

Power improvement

In a related development, the Chief Executive Officer of the Ghana Grid Company (GRIDCo), Mr William Amuna, says the inflow of gas from WAPCo and Ghana Gas has contributed significantly to the improvement in the power situation over the last few weeks.

Currently, he said, Ghana was receiving between 90mcf and 95mcf of gas from WAPCo and the same from Ghana Gas daily.

On the claim that Ghana owed N-Gas, he said he did not have any information to that effect, adding that gas supply from Nigeria was normal as expected.

Touching on improvement in the energy situation, he said the availability of gas turbines and progress in the water level at the Akosombo Dam had contributed to that.

The shutdown of most turbines for repairs, shortage of gas and the low level of water supply in the Akosombo Dam were some of the major causes of the low generation of power, causing the rationing of power to consumers.

Energy crisis since 1983

Although Ghana has had a long spell of energy crisis since 1983, the current crisis, which started in 2012, has seen timelines to its end reviewed a number of times.

While the industrial sector has had to face 130MW load shedding, domestic users of electricity have been enduring 24-hour blackouts followed by 12 hours of electricity supply.

The Electricity Company of Ghana (ECG) started implementing a power rationing plan initially but was unable to stick to its timetable due to the erratic power supply.

But in recent times, Mr Amuna said, about 1,600 to 1,700 megawatts of power was being provided at peak periods when many consumers used energy, while power to industries had increased to 700MW.

Considering the steady improvement, he said, the prospect of ending the load-shedding exercise, also known as “dumsor”, was very bright and realistic.

“We have gone through the challenges and we are getting close to the end. We should be getting out of the woods by the end of the year as promised.

“We will ensure that the commitment projects, including the power barges, come on stream. We are working closely with the Ministry of Power to ensure that the power crisis is brought to an end by December this year,” he stated.

On the power barges, he said the construction of transmission lines for them was ongoing.