Build a debt free gas sector
The country's electricity production is sharply shifting towards thermal which means more gas would be required to power the plants.
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Currently, gas is supplied from the processing plant at Atuabo, while some are imported from external sources such as the West Africa Gas Pipeline Company from Nigeria.
The procured gas is taken up by the major power producer, the Volta River Authority and other Independent Power Producers such as the Sonon-Asogli Power plant for the generation of power from enclaves at Aboadze (VRA) and Kpone, near Tema (VRA, Asogli). The power transmitter,the Ghana Grid Company Ltd (GRIDCo) then transmits power to the distributor, the Electricity Company of Ghana (ECG) for distribution to the final consumer.
The failure of some of the players along the value chain to pay for either gas supplied or electricity consumed has resulted in a huge debt in the sector. Much of the debt, however, is owned by the government which is the single largest consumer - through its ministries, departments and agencies - and subsidies which it does not honour in full or in time.
The national power producer, VRA, is at the top of the indebtedness, as it owes both the Ghana Gas Company and the West Africa Gas Pipeline Company. The VRA’s inability to pay is also as a result of the failure of the national distribution company, the ECG to pay for the power it is supplied with.The ECG, in turn, attributes its inability to pay to the failure of the government and its agencies to pay for power it uses.
The webbed cycle of debts in the sector, according to industry players, is not in the best interest of the country as threats to shut gas supply as a result of the debt keeps recurring. The government has, however, initiated steps to clear the debts.
Then comes in the Offshore Cape Three Points (OCTP)-Sankofa Gye Nyame gas project, the country's largest gas field which has Italian exploration company, Eni, having the largest stake and acting as the lead operator, working to supply gas starting 2018.
Even before gas production starts on the field, industry players believe the government must ensure that no new debt is accumulated when the project comes on stream.
The acting Chief Executive of the Ghana National Petroleum Corporation, Mr Alex Mould believes the sector must have a robust value chain with each player playing its role effectively so that entities can pay for gas supplied.
Even though the World Bank has provided a US$700 million guarantee for the gas to be produced, the GRAPHIC BUSINESS wants to stress the importance of instituting measures to ensure that the gas-to-power value chain is solid and each player is able to receive the required revenue needed to meet costs.
The GRAPHIC BUSINESS, therefore, agrees with the proposal by the GNPC boss and hereby urges the government and Finance Minister Seth Terkper, who is also the caretaker Power Minister, to put in structures to ensure that no new debt accrues to the gas sector, especially at intolerably high levels that render debt an unwanted liability, instead of an enabler.
Gas can be the game changer of Ghana’s economy and all players must ensure that the much anticipated economic benefit - serving as a catalyst for economic growth - is derived.
