The Volta River Authority (VRA) will have to spend some US$50million to purchase crude oil to power thermal plants if supply of gas from the Ghana gas processing plant in the Western Region is not restored this week.

The coming on-stream of Ghana’s gas deposit off-shore Cape Three Points has reduced the reliance on expensive crude to power the Authority’s hybrid thermal plants.

However, complete shutdown of the gas processing plant due to challenges with Tullow’s compressors and unreliable gas supply from Nigeria mean the VRA — the largest power producer — has to resort to purchasing crude for power generation.

Current generational shortfall is estimated between 300-600megawatts; a situation that has led to power rationing across the country, to the disdain of captains of industry.

Crude oil imports, according to the VRA, rose from 4.87 million barrels in 2012 to 5.17 million barrels in 2013.

Crude oil purchases for 2014 were over the 5.17 million barrels procured in 2014. One cargo of crude is estimated at 450,000 barrels.

The Authority estimates that a turbine consumes about 5,000 barrels of crude in a day. This requires about US$50million every three weeks to purchase crude for powering thermal plants in the country.

Financing of the crude oil purchases has, however, been very challenging for the Authority given that its tariff covers just about 60% of operational cost; with recently announced tariff increase by the Public Utilities Regulatory Commission deferred.

The B&FT in January reported that faulty compressorshave hindered gas supply from the Jubilee Field.

The compressor works in a similar fashion to a pump; it increases the pressure of gas by reducing its volume and transports it through a pipe.

Two thermal units of the VRA at Aboadze were running on about 50million standard cubic feet of gas from the Ghana Gas processing plant before the shutdown.

While sector managers are shying away from speaking to the issue directly, a source told the B&FT that gas from the Jubilee Field has actually been absent from the VRA’s plants “for some time now”.

Ideally, when gas is absent VRA plants that have dual fuel capacity are supposed to run on light crude oil.

The B&FT could not obtain from sector managers what implications of the shutdown will be for power generation in the meantime if the VRA is unable to procure enough crude.

Various challenges have hindered the delivery of a potential 120 million standard cubic feet of gas a day from the FPSO Kwame Nkrumah to the processing plant at Atuabo.

In January, Tullow oil indicated that it was in a position to supply up to the 120 million standard cubic feet of gas per day, but said power producers are unable to absorb all.

“Tullow is currently able to supply up to 120 mmscf of gas per day, and makes this volume of gas available every day. The volume requested by our customers has been well below this volume, and so far has consistently been below their own requests.”

Source: http://thebftonline.com/commodities/oil-gas/14599/Gas-plant-shutdown-to-cost-VRA-US$50m.html#sthash.pV4eFD9B.dpuf