President John Mahama has intervened in the current tussle between the Volta River Authority(VRA) , West Africa Gas Pipeline Company (WAPco) and Nigeria’s N – Gas over threats to cut gas supply to Ghana.
According to WAPco, President Mahama through Cabinet has directed the Public Utility Regulatory Commission (PURC) to sanction an increase in utility tariffs to help offset the debt.
“It’s a tough decision for the President to make because ultimately it will mean that the consumer will have to pay more for power,… If he is not able to do that and the country is not able to do that then things really will fall apart” , the Managing Director of WAPco Walter Perez said at a press conference to set the record straight on the issue.
N-Gas has warned it would cut supply by 70% on Friday 16th October, 2015 due to the VRA’s indebtedness to the two companies to tune of 181 million dollars.
The VRA owes WAPco 103 million dollars with the balance of 78 million dollars being owed to N-Gas and the other parties in the gas supply chain.
Since August 2014, VRA has received natural gas and pipeline related transportation services totaling 231 million dollars through WAPco but has paid only 50 million dollars of the amount.
VRA’s gas shipper N- Gas following pressures from the Nigeria National Petroleum Company a month ago formally notified WAPco to curtail gas supply on the deadline date until further notice.
“WAPco is contractually obliged to curtail deliveries to VRA at midnight on Friday 16 October, 2015”, Mr. Perez stated.
According to him the VRA must pay the debt in full while WAPco awaits for further direction from N-Gas.
He added that , “We find it unfortunate that the VRA debt situation has been allowed to deteriorate to the point where it now jeopardizes WAPco’s very existence as a company”.
Meanwhile Ghanaians should brace themselves for the worse ever power crisis , if gas supply is cut from 95 million standard cubic feet to 30 million standard cubic feet by Friday.
“WAPco management is keenly aware and acutely sensitive to the effect that this directive from N-Gas could have on power generation Ghana”, Mr. Perez said. 7 thermal plants will be forced to shut down on Friday if N-Gas goes ahead with its threats.
The seven Sunon Asogli, TAPCO, TICO, T3, TT1PP, TT2PP and MRP as of today -14th October, 2015 were receiving gas supply via WAPco from N-Gas.
All of them together produce 722 megawatts of power as part of Ghana’s total installed capacity of 2,846 megawatts.
Out of this, VRA’s production which includes hydro, thermal and renewable is about 2,104.
Government’s inability to pay up the debt by Friday to N-Gas means power supply from VRA will possibly reduce to 1,282 from the current 2,104 figure following the shutdown of those seven plants.
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