It is expected to further spend $272million to cover the entire cost of a project once touted as a “game-changer” in Ghana’s energy space.
The figure is in sharp contrast to claims by K.T. Hammond – Minority spokesperson on Energy – that Ghana National Gas Company has to date expended $ 1.3billion on the project.
The Corporate Communication Manager of Ghana National Gas Company, Alfred Ogbamey, in a statement released on Friday said: “The budgeted cost of the Ghana Gas project is $l billion.
The agreed interest rate on this sum amounts to $300million. So when the loan amount of $l billion and the estimated interest of $300million are capitalised, the asset cost will amount to $1.3billion.
“In accordance with provisions of International Accounting Standards (IAS) 23 on Borrowing
Cost; ‘all costs that are directly attributable to the acquisition, construction or production of the asset are to be capitalised as part of the cost of the asset’. Hence, the accrued interest of $300million is to be added to the total cost of the asset.
“This does not mean the cost incurred on the project to date is $1.3billion, because at the end of the project, repayment of the principal loan and interest will be made on the actual amount expended. Currently, the amount disbursed on the project stands at $728 million.”
Ghana currently has gas deposits of about 200 billion standard cubic feet offshore the Jubilee Field, which the country wants to utilise as a source of cheap fuel to power its thermal plants for generating electricity.
The processing plant can process all the 150 million standard cubic feet of gas per day capacity of the Jubilee Field partners.
The Ghana Gas project, which has begun producing gas to power the thermal plants of the country’s energy generator VRA, could mean a 20°/o reduction in fuel costs to the power industry – or savings of $2billion over a 10-year period. For the industry as a whole, this is enough to fund one 400MW power plant every other year.
The Energy and Petroleum Minister Emmanuel Kofi Buah argues that when in full production the Atuabo Gas Processing Plant is expected to save the nation over $500million a year from importing light crude to power the thermal plants, as gas costs barely half the price of light crude oil.