Ghana’s energy crisis is expected to worsen in the coming days, as the West African Gas Pipeline Company (WAGPCo) has threatened to cut gas supply to the Volta River Authority (VRA) due to its indebtedness to WAGPCo and Nigeria Gas.
Managing Director of WAGPCo, Walter Perez, who disclosed this to the media at an emergency press conference yesterday in Accra, said gas supply to VRA would be cut by October 16, 2015 if the Authority fails to meet its debt obligations.
According to him, since August 2014 VRA has received natural gas and enjoyed pipeline-related transportation services totaling $231 million through WAGPCo.
‘As of today, VRA has paid only $50 million out of the outstanding balance of $181 million. VRA owes $103 million to WAGPCo, with the balance being owed to the other parties in the gas supply chain.’
Mr. Perez indicated that WAGPCo regularly held talks with VRA, Public Utilities Regulatory Commission (PURC) over the matter before it reached crisis level.
History of debts
VRA owes Ghana Gas and Nigeria Gas $150 million and $182 million respectively. Nigeria Gas used the facilities of WAGPCo to transport gas daily from Nigeria to Ghana.
The gas from Nigeria is used to power Asogli, CENIT and VRA plants, and if gas supply ceases from Friday as indicated by WAGPCo, the country would return to the use of light crude to power its plants.
VRA has not been able to honour its debt obligations because the Electricity Company of Ghana (ECG) owes it GH¢150 million.
The Government, through its Ministries, Departments and Agencies (MDAs), also owes ECG a whopping GH¢1.5 billion. Several calls by ECG to government to clear the debt have proved futile.
Mr Perez added that ‘unfortunately, these efforts have not achieved the desired result, hence the threat to cut gas supply to Ghana by 16th October, 2015.’
‘Just one month ago, WAGPCo received a formal notification from VRA’s gas shipper, N-Gas that deliveries to VRA should be curtailed effective 16 October 2015.’
He stated that N-Gas informed WAGPCo of the intention of one of its major gas suppliers, Nigeria National Petroleum Company (NNPC) to curtail gas supply as a result of N-Gas being in payment default due to the inability of VRA to settle its gas supply and gas transportation invoices.’
More Dumsor
‘WAGPCo management is keenly aware and sensitive to the effect that this directive from N-Gas could have on power generation in Ghana.
‘We find it unfortunate that the VRA’s debt situation has been allowed to deteriorate to the point where it now jeopardizes WAGPCo’s very existence as a company.’
According to him, WAPCo was supplying about 95 million cubic feet of gas to VRA.
ECG’s abysmal performance
He said as result of ECG’s inability to pay VRA, it reportedly incurred losses which affected its ability to raise money to meet its obligations.
Mahama’s intervention
Mr. Perez told journalists that President John Dramani Mahama failed woefully to resolve the matter, hence WAPCo’s resolve to cut supply of gas to VRA.
By Daily Guide
