Gas Pipeline

wpid-gas-pipeline.jpgThe $974 million West Africa Gas Pipeline that JL delivers gas from Nigeria to Benin, Togo and Ghana could go dry sooner than expected.

If it does dry-up, Ghana may have to wait until it gets more than enough of its own gas — then it can export the surplus through the pipeline to other countries.

And the power supply situation may improve only when the country makes ready gas from its own fields.

?Until a miracle happens, that gas will cease. I just returned from Nigeria, and from all indications they are not happy with the gas going to other countries. You know they are privatising the power sector there. All of a sudden, they have realised that they need even more gas than they have been flaring all these years,? an official of one. of the donor agencies told the B&FT recently.

The reality? – For a whole year, from August 2012 to August 2013, the three countries received no gas from the pipeline because it was damaged by a vessel in Togolese waters.

Supply resumed when the pipeline was fixed, but the quantity never went close to the 120million cubic feet per day contractual volume.

Today, volumes supplied to Ghana have dropped to an all- time low, 30million cubic feet per day, making it difficult for the solely gas-reliant Sunon Asogli power plant (200 megawatts) to stay on.

Indeed, the Shenzhen Energy Group, mother-company of Sunon Asogli, told the Energy Minister Emmanuel Armah Kofi Buah upon his recent visit to China that but for the challenges with gas, they would have started the second phase of the project involving some 360 megawatts of power.

Consequently, Ghana has been plunged into another power-rationing exercise in spite of the coming on board of 400 megawatts from the Bui hydroelectric dam.

This is clearly a breach of contract, is it not? The B&FT asked managers of the sector. They admit it is a breach of contract but they want to tread cautiously; for what if the Nigerians say they will not give Ghana the gas any longer?

Indeed, the Energy Minister is expected to travel to Nigeria this week to implore them to give Ghana more gas.

But ECOWAS made a lot of noise about the project, which it saw as one of the flagship projects in its problematic attempt at regional integration. The sub-regional body may be facing another frustration of its efforts.

ECOWAS proposed development of the pipeline as far back as 1982. But it was not until April 2009, some 27 year later, that Ghana’s Volta River Authority began receiving gas through the pipeline for power generation. Several deadlines had been missed.

Dr. Kwabena Donkor, Chairman of the Parliamentary Select Committee on Mines and Energy, has long said that the electric power situation.sin Ghana is a national security issue and that the country cannot continue to tie its national security to the availability of gas from the West Africa Gas Pipeline.

He told the B&FT in April2013 that the country has to decide to get a re-gasification facility and import Liquefied Natural Gas (LNG) to meet its expanding energy demand – and treat gas from Nigeria only as a ?bonus?.

Even if gas becomes available locally, the re-gasification facility could serve as a backup, he said,

At the best of times, even before the breakdown of the pipeline, WAPCO has provided only about 40% to 60% of the contractual volumes.

Nigeria’s commitment to the project, he said, is only to ?project influence?; and that militant activity, which has in the past tampered with the project, is another security threat.

?We must be thinking about our national security,? he said.

As the hydropower potential of the country is said to have effectively run out, there is an increasing emphasis on gas for power generation. According to the VRA, the country currently demands some 300 million cubic feet of gas per day.’

The construction of infrastructure for gas from the country’s own Jubilee oilfield, a maximum of 120 million standard cubic feet per day, has run far beyond its initial completion period and is not expected until the end of the year.

The West Africa Gas Pipeline Company, on its part, sees itself only as a transporter and not a supplier of gas, as such, it has often stated that it cannot guarantee the security of supply.

Source B&FT

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