Wednesday, 22 October 2014

Ghana’s quest to wean itself from dependence on Nigeria’s Gas

In Ghana, homes and businesses have been facing irregular supply of electricity for several months. Independent Power Projects (IPPs) in Ghana, which rely on gas supply from the West Africa Gas Pipeline (WAGP), have suffered deficits in supply since the WAGP project commenced.
The pipeline is supplied by N-Gas, a consortium of companies including Nigerian National Petroleum Corporation, NNPC, Shell Petroleum Development Company, SPDC, and Chevron Nigeria Limited, along with local power companies.
The International Project Agreement (IPA) which was signed in 2003 by WAGPCo and the governments of Benin, Ghana, Nigeria and Togo provides that N-Gas has an allocation to supply up to 200million standard cubic feet of gas per day.
However this year, gas supply from the system which runs offshore from Nigeria to terminals in Benin, Togo and Ghana’s Volta River Authority (VRA) had fallen to 50 million standard cubic feet from around 80 million six months ago.

“When the project started, we went ahead to build Independent Power Projects, which were supposed to be powered through gas from Nigeria. The power projects suffered greatly due to delay in the flow of gas from Nigeria,” Moses Asaga, the Former Chairman of Ghana’s Parliamentary Committee for Energy and Mines said.
This has had an adverse effect on Ghana’s economy and infrastructure. Power cuts have become more frequent and Ghana’s economy was hurt in 2013 by an energy deficit. Just last week, water supply was cut off to homes and businesses. Also, the state Electricity Co. of Ghana expanded planned power cuts because of the shortage of natural gas from Nigeria.
Dr Kwabena Donkor, Chairman of the Mines and Energy Committee of Parliament criticised the Ghanaian government for its over-reliance on Nigeria for gas supply.
According to the MP, it is “mentally retarding” and a case of “intellectual laziness” for the government to rely on Nigeria for gas.
Ghana’s demand for electricity is between 1,800 and 2,000 MW, but it is targeting 5,000 MW by 2016.
Ghana’s dependence on the pipeline is however expected to shrink in coming years as it exploits natural gas reserves held in its offshore oil fields, which began producing in December 2010.
Its gas is to come from the Jubilee field, located 60km offshore, between the Deepwater Tano and West Cape Three Points blocks in Ghana. The field was discovered in 2007 and developed by Tullow Oil with other equity partners; Tullow with 49.95per cent, Kosmos with 18per cent, Anadarko with 18per cent, Sabre Oil & Gas with 4.05per cent, and Ghana National Petroleum Corporation, GNPC, with 10per cent.
The West Cape Three Points held by Tullow with 22.9per cent, Kosmos with 30.88per cent, Anadarko with 30.88per cent, Sabre Oil & Gas with 1.85per cent, GNPC with 10per cent, and EO Group with 3.5per cent.
The project however has suffered delays since commencement but would be coming online soon. President John Mahama announced that the supply of gas from the oil field will start production by the end of this year.
“Some gas will start flowing soon but commissioning will be when the full volume of 120 million standard cubic feet of gas is being transmitted to Aboadze and I suppose that will be sometime by the end of this year,” he told reporters.
Besides Jubilee, Ghana has embarked on massive development of other gas projects worth billions of dollars to produce commercial feedstock for its electricity supply.
The Chief Executive of Volta River Authority, Mr. Kwesi Awotwi had said in April this year that the projects would be completed between the next five or seven years.
The development will reduce the volume of Nigeria’s gas which West African nations, including Ghana, Benin and Togo utilise for electricity generation.
Currently, gas from the field has been injected into the undersea reservoir pending the completion of a pipeline infrastructure to harness the product for productive purposes.
Source: BusinessDay

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