The Executive Director of the Africa Centre for Energy Policy (ACEP), Dr Mohammed Amin Adam, has urged the government to consider the option of procuring gas from other suppliers in Nigeria following the inability of N-Gas, which supplies gas through the West Africa Gas Pipeline Company (WAGPCo), to meet the contractual volumes.
The agreement with N-Gas is to deliver 120 million metric standard cubic feet of gas (mmscf) daily, but the company is currently supplying an average of 30 mmscf. Latest supply was estimated lower at about six mmscf.
In an interview with the Graphic Business, Dr Amin Adam pointed out that the contract allowed for third party access on the pipeline, hence the need to consider that option as indigenous gas production was not enough to meet the country’s growing gas demands.
“If N-Gas is not giving us much of the gas, we should be able to negotiate with other suppliers in Nigeria and the agreement on the West African Gas Pipeline allows for third party access to the pipeline,” he said.
He added, “So you can negotiate with other suppliers in Nigeria who can supply you through the same West African Gas Pipeline without breaking the law or breaching the contract. So Ghana should be looking at that option as well.”
Good option, but …
The national power producing company, the Volta River Authority (VRA), has confirmed that it had considered buying gas from third party sources other than the West African Gas Pipeline Company (WAGPCo).
It, however, explained that its inability to meet the financial obligations related to getting gas from third party sources had stalled the move.
A source at the company told the GRAPHIC BUSINESS that “we have actually considered that option just that it comes with some financial obligations and we don’t have the money to meet their obligations.”
It added that, “We can buy gas from other sources. We are not buying from them. If we had the money we would because they would want us to meet some financial obligations and make some deposits and all that which we don’t have right now.”
Reduction in supply
Gas flow from the WAPCo pipeline has reduced to only six mmscf from the contracted volume of 120 mmscf, and this is expected to affect power supply, as the power plants that rely on gas would be unavailable.
The source, however, explained that the shortfall in the supply of gas from Nigeria was as a result of vandalism on some pipelines in Nigeria, and not due to the country’s indebtedness to N-Gas.
“Currently, there have been some attacks on the pipeline, and so we don’t have gas flowing through the WAPCo pipeline,” the source explained.
Growing gas demand
The country’s current demand for gas is estimated to increase to about 400 mmscf but gas production from indigenous gas is not enough to meet this demand.
The gas processing plant at Atuabo has the capacity to produce 120 mmscf of gas per day but is delivering an average of 80,000 mmscf daily. Some amount of gas is also expected from the Tweneboa-Enyera-Ntomme Fields which come on stream in 2016 (80,000 mmscf) daily.
“The only relief we can get is Sankofa which comes on in 2018, and will bring in between 180 mmscf to 200 mmscf daily. If that comes on, then our demand for gas till 2020 will be met,” he said.