Business News of 2014-03-18

MP calls for renegotiation of gas contract with Nigeria

The Minority Spokesperson on Mines and Energy, William Aidoo, is calling for a renegotiation of contracts between Ghana and Nigeria for the supply of natural gas to power Ghana's energy plants in Aboadze.

Mr. Aidoo is convinced the current contract terms between the two countries is a disincentive to Nigeria's multinational companies- Shell and Chevron- which are looking elsewhere for better terms.

His comments follow a nagging power crisis in Ghana, which has led to load shedding programme nationwide. Officials of the Volta River Authority (VRA) have among other things, attributed the current crisis to the paltry supply of gas from Nigeria.

Per the contract, Nigeria is supposed to provide 180 million standard cubic feet of gas but the most populous African country is rather providing between, 70-80 million feet cubic meters of gas, an amount, William Aidoo insists is too small to arrest Ghana's power crisis.

The Minister of Energy, Emmanuel Armah Kofi Buah, is currently in Nigeria trying to negotiate with the Nigerians for the supply of gas.

William Aidoo told Joy News' Parliamentary Correspondent, Elton John Brobbey that the minister must take advantage of his presence in Nigeria to meet with key stakeholders and multinational companies to try and renegotiate the contract for the supply of Gas.

He said he has information the multinational companies in Nigeria- Shell and Chevron prefer to sell the natural liquefied gas to other companies at higher prices instead of sending the raw gas to Ghana at a cheaper cost under the West African Gas Pipeline project.

The Minority spokesperson on Mines and Energy said since gas remains a relatively cheaper commodity in providing power as compared to crude oil, it is only prudent that Ghana sits with Nigeria to renegotiate the contract in order to have a constant flow of gas for use by Ghana's power plants.

"Why have we waited so long for there to be load shedding before government acts on this," he questioned. "We should have done this long time ago," he added.

He said the issue is not about the availability of gas but rather about Ghana's ability to pay for it. In a reaction, the Communications Consultant to the Energy Ministry, Edward Bawa, said he is not privy to the information that Nigeria is selling the gas to other companies at a higher price.

He said Nigeria is bound by the West African Gas Pipeline project contract to provide gas to other West African countries including Benin and Togo and so Ghana cannot go independently and renegotiate the contract with Nigeria. He is optimistic the Energy Minister, who is currently in Nigeria, will be able to take decisions, which will be in the interest of the country.