Government has disclosed that it is working hard to construct a dedicated pipeline from Takoradi to Tema to supply gas to the power enclave in the area.
The project will be linked with gas production from the Sankofa Gye Nyame field which is estimated to hold 204 million barrels of oil, and 1.1 trillion standard cubic feet of natural gas.
First oil is projected to come on-stream in the third quarter of 2017, while First Gas will follow in the second quarter of 2018.
Explaining the need for the pipeline, the Petroleum Minister, Emmanuel Armah-Kofi Buah stated that the West African Gas Pipeline Company’s (WAPCo’s) decision not to agree with a workable tariff with Ghana has pushed government to get the project done ahead of time.
“Let me blunt, due to WAPCo’s delay in agreeing to workable tariff with the regulator, WAGPA, and it its ambivalence, we in Ghana have deepened our resolve to construct a dedicated pipeline from Takoradi in the West to Tema in the East.
He pointed out that a high tariff that does not attract gas transportation contracts yield zero revenue.
“That is why the Committee of Ministers in Abuja instructed WAPCo and WAGPA to develop a tariff mechanism that will encourage additional gas from the sub-region to be transported through the WAGP with the view to deepening the link between the regional supply sources and market,” he recalled.
He expressed hope that the deliberations are ongoing to bring into fruition the plan.
Unhappy with disconnection of gas supply
Mr. Buah lashed out at WAPCo for disconnecting gas supply to Ghana over the country’s debt to the company.
According to him, the company’s decision is not economically viable since the Volta River Authority (VRA) will need the gas to operate before it can pay the debt.
The government of Ghana owes WAPCo and N-Gas in excess of 162 million dollars
The Petroleum Ministry has promised to pay 30 million dollars by close of the year after paying 20 million dollars.
WAPCo warns Ghana
Already, the Managing Director of WAPCo, Walter Perez has warned that the company will take drastic action against the government of Ghana if it fails to pay the debt by end of the year.
But Mr. Buah also cautioned that WAPCo’s actions could generate adverse reactions from other parties which may not auger well for the company in the long run.
“My plea to the supplier and transporter of gas is that they should kindly bear in mind that the debtor must continue to live to be able to pay his debts…dialogue remains the tool of choice for securing a mutually acceptable solution,” he said.
“I reckon that a company has every right to operate as a business but WAPCo also has to take into consideration the facts on the ground. I would suggest that that you take a more pragmatic approach to your decision-making,” he added.
He pointed out that, although WAPCo seems to be monopolistic in the industry, there is a limit to the powers of the company over the players in the value chain.
“WAPCo should bear in mind that that its actions or inactions can generate adverse reactions from other parties which may not auger well for their business in the long run,” he cautioned adding that “WAPCo needs to be more creative in the face of the new global oil and gas environment”.
WAPCo’s tariff unreasonable
Explaining his comments, Mr. Buah stated that WAPCo’s tariff setting mechanism was not competitive since the company solely relies on its monopoly to determine prices.
“Tariff setting ought to recognize the principle of equating landed price of gas at one set location with that form alternative sources like LNG, indigenous gas, and even liquefied fuel to ensure there is competitiveness around the outcomes,” he said.