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NDC gov’t bought 3 FSRUs – Boakye Agyarko was right

BOAKYE AGAKOR

It has emerged that the erstwhile National Democratic Congress (NDC) government did, purchase, three Floating Storage Regasification Units (FSRU), contrary to the Minority MPs position that they purchased only one.

Questions over the purchase arose during the vetting of Energy Minister Boakye Kyeremateng Agyarko, who revealed that Ghana purchased three Floating Storage Regasification Units at exorbitant prices to transport excess gas from the Western to the Eastern enclave, when only one unit was required.

Minority MPs led by Minority Chief Whip, Alhaji Mubarak Mohammed Muntaka, however questioned his assertions and demanded evidence for his claims.

However documents cited by Citi Business News reveal that three FSRUs were indeed purchased by the erstwhile NDC government between 2015 and 2016.

FIRST AGREEMENT

The first agreement dated 7th October 2015, is called a “Gas Sales Agreement” entered into between West Africa Gas Limited (BVI) (A British Virgin Islands company) as “Seller” and the Government of Ghana represented by the Ministry of Power as “Buyer.” The Agreement was signed on behalf of Ghana by Dr. Kwabena Donkor, the then Minister for Power. It relates to WAGL BVI, as the lessee of an FSRU to be used for the regasification of LNG to Gas at the Tema port for supply of the gas to Ghana.

This is a 5-year contract, although the parties could agree to extend the term. During that term, Ghana is under an obligation to “take the delivery of and shall pay for such Gas.” Our investigations show that this was the Agreement that obtained parliamentary approval under article 181(5) of the Constitution, as an international economic and business transaction involving WAGL BVI, a non-Ghanaian entity.

SECOND AGREEMENT

We have also seen a copy of a second agreement dated 21st October 2016, called a “Facilities Use Agreement” and this time, entered into between Quantum Power Ghana Gas Limited (a Ghanaian company) as “Operator,” Quantum Power Ghana Gas BV (a Dutch company) as “Quantum Sponsor,” and Ghana National Petroleum Corporation as “Customer.” Unlike the Gas Sales Agreement the Government of Ghana is not directly a party to the Facilities Use Agreement.

This is significant because unless it is shown that GNPC was acting as “alter ego” of Ghana, this Agreement did not require parliamentary approval to be effective. Under this Agreement, Quantum is to develop and LNG terminal facility offshore Tema to perform, among others the “regasification of LNG” for GNPC to purchase. This Agreement was signed on behalf of Ghana by Thomas Manu, the Deputy CEO of GNPC.

THIRD AGREEMENT

We have also seen a copy of a third agreement dated 30th October 2016, called “LNG Operation and Services Agreement, entered into between GNPC as “Customer” and Kaheel Terminal Investment LLC (a Dubai company) as “Operator”. Under this agreement, Kaheel is to develop and maintain infrastructure at the Takoradi port, including an FSRU. This is a Build-Own-Operate-Transfer arrangement, although the FSRU is specifically excluded from the ‘Transfer’ part of the deal.

This time, the Agreement was signed on behalf of GNPC by its Chief Executive Officer, Alexander Kofi Mensah Mould. But just like the Facilities Use Agreement, the Government is not directly a party to this Agreement, which would mean that parliamentary approval would not be required under article 181(5) of the Constitution.

The Energy Minister, Boakye Kyeremateng Agyarko, making his claim during the vetting also argued that purchasing two more units was needles.

‘‘All the studies said FSRU one put into the Eastern enclave to support the gas deficit. Before anyone could say jack, there was a second FSRU brought to Parliament, Sahara when the indication was that do only one, it was brought to Parliament and passed at exhorbitant price. The commodity price blended was 7.8 dollars per million mbtus when if you look at Houston, it was about five’’.

‘’ Then the processing cost was 3.3 and later hand changed to 2.2 when regasification is sometimes below a dollar; now you ask yourself if regasification all around is a dollar, why am I paying 2.2 and why am I being passed. Just as we were flaying our arms over the second FSRU,  third one comes in…so now we have three FSRUs where we need one and the President on July said the World Bank is breathing on my neck, let us form a committee and decide what to do; that was needless hustle’’.

Source:  http://citibusinessnews.com/index.php/2017/02/13/ndc-govt-bought-3-fsrus-boakye-agyarko-was-right/

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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