Business News of 2014-02-03

Gas won’t flow in April – Energy Minister

The Minister for Energy and Petroleum, Emmanuel Armah Kofi Buah, has said that Sinopec’s statement that it will deliver “first gas” by April 28, 2014 does not mean the Aboadze thermal plant will receive gas by that date.

Instead, the delivery of gas to Aboadze for power generation will happen in the last quarter of the year the Minister said, adding that a lot of processes need to be completed between when the gas pipeline and processing plant are ready and when Aboazde will receive gas.

“As we speak, there are three critical milestones we are looking at: the gas project, as you know, involves a 65-kilometre pipeline, a gas processing plant and a 110-kilometre pipeline from Atuabo to Aboadze...As the sector minister, what I am interested in is when gas will actually flow. When will meaningful numbers flow to power our thermal plants?...My understanding is that for us to get over 100 million standard cubic feet of gas for the thermal plant in Aboadze, it is not going to be within this period but close to the last quarter of the year.”

The ministry, he said, has done an “independent audit” -- and a lot of key risks were identified in the three critical milestones toward the delivery of gas: mechanical completion, pre-commissioning and commissioning.

When the Energy Minister and other power sector chiefs visited Atuabo on January 24, Sinopec, the contractor for the project, gave March 31st as the date for “mechanical completion” and April 28 for “first gas”.

The Ghana National Gas Company (GNGC) now says that the dates and terms are being misinterpreted in the media. A press statement by the company said “first gas” will kick- start the pre-commissioning and commissioning stages -- meaning that Aboadze will not be receiving gas by then.

Pre-commissioning, it explained, involves “the verification of functional operability of elements within the system by subjecting them to a set of simulated operational conditions to achieve a state of readiness for commissioning.

“Commissioning consists of checking and testing all functions according to their design parameters in conditions as close as possible to the design conditions, and bringing them to the status of ‘ready for start-up/operations’. It is at this point that the gas processing plant will be ready to deliver gas,” the statement said.

It added that: “Ghanaians will agree that these processes will take some considerable time to complete before gas can actually be delivered to the Volta River Authority for power generation.”

The GNGC urged all stakeholders not to pressure the project implementation managers, “because in our considered view it is imperative to do a good job taking into consideration the three key components of project management, quality, cost and time”.