Business News of 2014-04-23

Gov’t spends GH¢1.8 billion on light crude

Government spends about GH¢1.8 billion on light crude oil every year to power thermal generators to produce electricity, John Abdulai Jinapor, Deputy Minister of Energy and Petroleum, has disclosed.

Speaking recently to journalists at Tema, Mr Jinapor said there was the need to use electricity prudently, explaining that it cost government a lot of money to power thermal plants.

“Government spends GH¢5 million everyday on light crude oil to power thermal generators,” he stated.

Abdulai Jinapor urged Ghanaians to adopt energy conservation practices in order to reduce waste and ensure that power is extended to others who don’t have access.

The Minister, speaking at the opening of a two-day international workshop on Liquefied Natural Gas (LNG) Negotiations in Accra recently, said Ghana’s thermal energy sector will in the near future rely mainly on gas as a source of fuel.

He noted that the current continuous reliance by thermal power industry on expensive light crude oil and in some cases, diesel, does not make economic and strategic sense.

Jinapor said the country cannot attract additional investment in thermal power generation – whether public or private – without guaranteeing the minimum returns on investment associated with these investments.

He disclosed plans by the Ministry of Energy and Petroleum to encourage the development of a Liquefied Natural Gas (LNG) importation and re-gasification business in Ghana.

“An LNG Floating Storage and Regasification Unit (FSRU) will not only help remove the immediate fuel constraints, but also reduce significantly the associated cost of using Light Crude Oil,” he added.

Jinapor recounted how challenges over the past two decades such reduced water level in the Akosombo Dam and the disruptions in the supply of gas from the West Africa pipeline had led to harsh load shedding, noting that these challenges have strengthened “our resolve to adopt other viable alternatives” to ensure reliable supply of energy with particular emphasis on fuel for thermal plants.