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GNPC to lose US$336.6m if…

  • POSTED ON: September 22, 2017
  • SOURCE: Graphic
  • CATEGORY:

The Ghana National Petroleum Corporation (GNPC) stands to lose US$336.6 million this year should it fail to off-take all the gas that will be produced at the Offshore Cape three Point (OCTP) fields.

Under the OCTP gas agreement, the national oil company is obliged to either take all the gas produced from the field or pay for its equivalent cost.

The Ghana National Petroleum Corporation (GNPC) stands to lose US$336.6 million this year should it fail to off take all the gas that will be produced at the Offshore Cape three Point (OCTP) fields.

Under the OCTP gas agreement, the national oil company is obliged to either take all the gas produced from the field or pay for its equivalent cost.

GNPC is, therefore, expected to lose about US$28 million per month which translates into US$336.6 million in a year should it fail to off take the gas that would be produced.

As a result, the corporation has identified the 450 megawatts Karpower ship which arrived in the country last month as very critical in meeting its take-or-pay obligation as the Karpower ship, when installed, is expected to utilise approximately 90mmscf/d of gas from the OCTP annually.

This was disclosed when officials of GNPC appeared before Parliament’s Select Committee on Mines and Energy to discuss the corporation’s 2017 work programme.

Background

Ghana signed a US$7 billion contract with Eni Spa for the development of the OCTP integrated oil and gas project.

The project, being undertaken by Italy’s largest oil company, Eni Spa, in collaboration with Vitol Energy, is expected to see the development of the Sankofa and Gye Nyame fields that will provide substantial gas to operate Ghana’s thermal power plants for 20 years.

The project will deliver 170 million cubic feet of gas per day and it is expected to generate an additional 1,100 megawatts of power for Ghana.

US$4 million to support AG

The corporation also pointed out to the committee its decision to provide adequate support to the Attorney-General’s (A-G) Department’s preparations towards the final determination of the maritime boundary case between Ghana and Cote d’Ivoire.

It has, therefore, budgeted an amount of US$ 4 million to support the A-G in this regard as the GNPC considers the successful determination of the maritime boundary dispute verycritical to increasing average oil production in the Tweneboa, Enyenra, Ntomme (TEN) fields.

Office relocation

The officials also informed the committee of the corporation’s plans to relocate operations to Sekondi-Takoradi in the Western Region, as the corporation had already commenced a process of identifying suitable properties, facilities and parcels of land that could assist to make the relocation a reality.

The management of GNPC has, therefore, made a provision of US$7.5 million in its 2017 budget towards this project.

The amount is earmarked for initial office rental, land acquisition for office space, residential accommodation, pipe yards and architectural drawings and acquisition of the necessary permits.

Production projects

Major works to be carried out on the TEN fields this year include the construction of the TEN gas tie to the Jubilee pipeline and commencement of gas export from the field. This is to ensure gas export to the Atuabo Processing Plant when the Jubilee field is shut down.

In addition to oil production of 63,500 bopd, the field is also expected to deliver about 24mmscf of gas per day and it is being anticipated that judgement in favour of Ghana in the maritime boundary dispute may increase oil production to 69,980 bopd.

The development of the Sankofa-Gye Nyame field which commenced in 2015 is envisaged to deliver first oil in the third quarter of 2017 and first gas in the second quarter of 2018.

Major works to be carried out on the field include the completion of wells for first oil, arrival and commissioning of an FPSO and the continuation of work on the onshore receiving facility.

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