Ghana loses $720m due to uncompleted gas projects – Alex Mould

Alex Mould

The former Ghana National Petroleum Corporation (GNPC), Alex Mould, has said the government has caused the nation to lose about $720 million by diverting funds earmarked for completion of two major pipeline projects – WAPCO reverse flow and the Karpower Aboadze-Sekondi pipeline connectivity.

“The relocation of the power ship from Tema to the Western region should have been completed by mid-2018; according to the initial arrangement and timelines by the previous John Mahama administration which secured and signed the Power Purchase Agreement under emergency. The relocation should have been completed once the ten-kilometre gas pipeline was laid from Aboadzi to the Sekondi Naval Base,” he said.

The former GNPC boss said the gas pipeline project was delayed by almost 18 months, even though GNPC had already earmarked funds for these projects.

 “But the current NPP led administration diverted the funds to bailout Bulk Oil Storage and Transportation (BOST) in 2017 and this was the main cause of the 18-month delay of the evacuation of gas and possibly the cause of Tullow not meeting its production targets,” he stated.

Earlier this month when President Nana Addo Dankwa Akufo-Addo turned on the valves of the Karpowership for the use of natural gas from the country’s gas fields by the 450-megawatt plant, the Energy Ministry stated at the ceremony the country was losing US$40 million a month for the Karpowership operating from Tema due to the delay in executing the pipeline projects.

“The relocation will save a whopping monthly take-or-pay cost of $40million and projected annual savings of $480million”, it stated.

But the former GNPC CEO said from what the government is saying and by simple calculation, “$40 million multiplied by 18 months is $720 million financial loss to the State due to the delay in executing the pipeline projects.

“And this $720million was to cushion you and I from paying high electricity bills but the government chose to use the $10 0million we left on GNPC balance sheet as at December 2016 to bailout BOST just for their parochial interest” he bemoaned.

Mr Mould further expatiated on how the prolonged delay in relocating the power barge to the Senkondi power enclave as against the initial arrangement the former administration handed-over to the present President Akufo-Addo government had cost financial losses to the state.

“The whole issue is that GNPC/Ghana Gas has not been able to resolve the reverse flow in a timely manner to be able to pump compressed gas to Tema enclave from Aboadzi.

“As such Ghana has been saddled with a take-or-pay bill which could only be resolved by an expedited offtake, hence the necessity for Karpowership relocation.

“Unfortunately, some challenges occurred between GNPC and Ghana Gas in 2017 and 2018 which delayed funding of the relocation project.

“Upon instructions from Jubilee House, GNPC diverted almost $100m to bail out BOST rather than fund the two pipeline projects – WAPCO reverse glow and the Karpower Aboadzi – Sekondi pipeline connectivity,” he stated.

According to Mr Mould, his sources at BOST reveal that the GNPC “never-never loan” funds were used to pay an overdue debt to companies associated with people close to the President, Nana Akuffo-Addo.

Mr Mould said this caused the delay in the relocation timeline thereby leading to less gas off-taking from Ghana Gas station at Aboadzi which resulted in the pumping of the gas back into the oil reservoir. “This had an adverse economic effect on the government of Ghana, Tullow and eniGhana, as well as an adverse environmental impact.”

The energy and finance expert also said that to fulfil the government of Ghana off-taker agreement of the Eni SGN project, some Independent Power Producers (IPPs) were to be built in the Aboadzi Enclave and that this financing was being supported by the World Bank as part of the conditions continuing for the eniGhana-led SGN project.

The other more significant condition imposed in the conditions continuing was that the WAGPI/WAPCO pipeline reverse flow operation where compressed gas of the WAPCO pipeline to push compressed gas from the eniGhana-led SGN from Aboadzi.

All these were to be established by first gas pumping around mid-2018.

This is all documented in the project continuing conditions and milestones at the Ministry of Energy, GNPC and with the World Bank, who gave financial guarantees of $700million to the SGN project, operated by EniGhana and Vitol/Wood fields, according to him.

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Source: Myjoyonline.com

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