Business News of 2014-05-28

VRA buys $50 million crude every 18 days

Volta River Authority (VRA) imports 450,000 barrels of crude oil at a cost of $50 million every 18 days to power thermal plants to make up for the shortfall in natural gas.
This generates 207,000,000 units of electricity.
Only $25 million will be needed to buy natural gas to generate the same amount of power that the crude generates if natural gas is available.
Kofi Ellis, Director of Planning and Business Development of VRA, made this known to The Finder on the sidelines of a workshop organised by the Public Utilities and Regulatory Commission (PURC) on Natural Gas Processing and Pricing from domestic gas resources.
The workshop discussed domestic gas processing and pricing methodologies.
Kofi Ellis said 5,000 barrels of crude oil produces 2.3 million units of electricity a day
He explained that the demand for natural gas to generate power far outweighs the supply of the commodity, forcing VRA to spend so much on crude oil importation.
According to him, forecast of natural gas supply from now to 2025 points to a shortfall, which VRA will have to buy crude to offset.
For example, the forecast for this year puts thermal generation at 9,348 trillion units, which requires 280 million Standard Cubic Feet of natural gas.
However, if the West African Gas Pipeline (WAGP) supplies the full contract of 123 million Standard Cubic Feet per day and Jubilee supplies 60 – 113 million Standard Cubic Feet a day, there will still be a deficit of about 50 million Standard Cubic Feet per day.
The bad news is that Jubilee is yet to come on stream and WAGP is providing about 75 million Standard Cubic Feet of gas, creating a shortfall of more than 200 million Standard Cubic Feet of gas.
The projected gas requirement by 2025 will range between 450 MMscf/day and 759 MMscf/day.
Kofi Ellis took participants through various options, including the use of liquefied natural gas (LNG), which are being explored to make up for the shortfall.
Executive Secretary of PURC, Samuel Sarpong also took participants through various factors that went into the pricing formula.
He said by the time Ghana Gas takes delivery of the first gas from the Jubilee filed, the price of the natural gas would be ready.
He announced that natural gas prices would also be adjusted on a quarterly basis through the Automatic Tariff Adjustment formula.
Source: The Finder
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