The African Centre for Energy Policy (ACEP) has called on the Ghana National Petroleum Corporation (GNPC) and Ghana National Gas Company (GNGC) to formalise the ownership of natural gas from Ghana’s oil-fields since the GNPC legally owns the gas but GNGC, also known as Ghana Gas, is responsible for processing and marketing the gas.
According to ACEP, there is the need for a contractual relationship between GNPC and GNGC to enable the company to be responsible for the gas from the jubilee fields when the pipelines and other facilities GNGC is constructing are completed by March 2014. In a telephone interview with Public Agenda last Friday. Mr John Peter Amewu, Deputy Director of ACEP, quips: “The gas belongs to GNPC. Ghana Gas has no gas.”
Mr Amewu contends: “As at the time the law was made, we had not foreseen that Ghana Gas will be established. What needs to be done now is an amendment of the law or GNPC has to assign its ownership of the gas to Ghana Gas through a contractual arrangement. Otherwise legally, Ghana Gas has no ownership.”
In an interview with GBC’s Radio Ghana last Friday, Mr Mohammed Amin Adam, Executive Director of ACEP, also called for a formalisation of the ownership of the gas so that GNGC could deal with the monetisation of the gas, and the revenues accruing from the gas.
The Petroleum (Exploration and Production) Law, 1984 (PNDCL 84) vests ownership of
the country’s gas in the GNPC. Section 16 (2) of PNDCL 84 provides: “Any natural gas produced by a contractor in association with crude oil which is not used in petroleum operations pursuant to this section and all natural gas produced other than in association with crude oil shall be the property of the Corporation [GNPC] except as may otherwise be agreed upon by the Corporation and the contractor in accordance with the terms of a petroleum agreement.”
But according to the website of GNGC, the company “expects to receive between 70-120 MMSCFpd [Million Metric Standard Cubic Feet per day] of gas from the Jubilee Partners.” It is not clear whether GNGC will receive the gas directly from the operators of the Jubilee field without recourse. But industyr experts say it should not be difficult for GNPC and GNGC tc enter into a contract for he corporation to cede its right of ownership to the company since they are both state-owned entities. It is also unknown whether the gas master-plan being crafted has taken the ownership issue into consideration. The experts, however, expect the Exploration and Production Bill laid before Parliament to transfer the ownership of the gas from GNPC to GNGC.
Incorporated in July 2011, Ghana Gas was set up following recommendations by a Gas Development Task Force that was commissioned by late President John Atta Mills to build, own and operate infrastructure required for the gathering, processing, transporting and marketing of Natural Gas Liquids (NGLs). The natural gas, processed into Liquefied Petroleum Gas .(LPG), will be sold to bulk distributors for onward retail in the country and beyond. GNGC is constructing a 150-MMSCIpd capacity gas processing plant at Atuabo in the Ellembele District, Western ,Region (WR). A 111-kilometre (kin) gas pipeline is also being constructed from Atuabo to Aboadze, near Takoradi, capital of WR, to feed the Volta River Authority’s (VRA) gas-fired plant to generate electricity. GNGC is also constructing a 75-km lateral pipeline from Essiama to Prestea, both in WR.
At a national forum on policy options for gas sector development in Ghana held in Accra Fast Thursday, Mr Amewu made a presentation in which he raised the issue of the ownership of the gas, calling for a legal framework for GNGC to own the gas. “How do you transform a monopolistic gas market into a competitive one? What is the fiscal regime for the national gas exploration and exploitation?” were some of the questions he asked.
He recommended the Formulation of an appropriate and comprehensive gas pricing policy; introduction of good fiscal incentives to attract investors to develop the gas fields; and the increment of the economic value of gas resources through exports of NGLs, among others. “Our gas market must be well developed,” he added. The forum, which was sponsored by STAR-Ghana, UKaid, USAID and DANIDA, brought together officials of the Ministry of Energy, energy experts, civil society organisations and the media.
Source: Public Agenda
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