Nigeria To Ghana: No Money, No Gas

cape three point oil and gas project

By: Vincent Baffour-Acheampong

Nigeria is considering cutting gas supply to the Volta River Authority (VRA) following the power producer?s failure to pay an estimated $ 120million for six months? supply of gas, information gathered by Business Day has revealed.
Though Nigeria paid Ghana $ 10 million as compensation for having breached its gas supply agreement with the country, the VRA has failed to pay for gas received from Nigeria; a situation which sources say is necessitating Nigeria?s move.

GasHowever, the VRA has also pushed the blame for its failure to settle its outstanding debts (owed Nigeria) to the failure of the Electricity Company of Ghana (ECG) to settle its GHS 1.2 billion debt owed it.
According to VRA, the ECG?s failure to pay its outstanding debts (owed VRA) would mean it would not be able to settle debts owed Nigeria.
This revelation seems to tie with assertions made by Former Deputy Governor of the Central Bank and Economist Dr Mahamudu Bawumia at a lecture at the Central University College last week.
Delivering his lecture, Dr Bawumia stated that VRA owes Nigeria Gas $100 million, a situation which was causing the oil rich nation to drag its feet regarding supplying gas to Ghana while the amount remains unpaid.
He asserted that the current erratic power supply plaguing the nation was more of a financial issue than a technical one.
?The untold story about the erratic gas supply from Nigeria is that Ghana owes Nigeria Gas US$100 million. Nigeria Gas is therefore dragging its feet with regards to the supply of Gas while this amount is unpaid. Ultimately, the dumsor problem is more of a financial problem than a technical one?, Dr. Bawumia stated.
He further revealed that Government owes ECG some GHC700 million and owes VRA GHC1.0 billion; a situation he says has compromised the balance sheet of VRA and its ability to import crude oil for the generation of power.
?This situation has in turn forced VRA to over use the Akosombo dam by 30% more than recommended since 2012 thereby causing the drop in the level of the dam?, he suggested.
Meanwhile, VRA has hinted it needs about $ 3billion to build new thermal plants and carry out other power projects to improve the power generation mix for the country.

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